Take a look at this article:
It goes over some of the symptoms of drive problems including what you're seeing. They have a link to a much bigger book too. If you download that book and look at the block diagrams of the systems and data flows, you'll notice that hard drives, USB ports, etc. etc. all feed out of an I/O controller. On the version of the book that I have these are on pages 14 and 15. From what you've said, the unit won't boot off an internal drive, and it sounds like you're also saying it won't boot off a bootable USB flash drive either. The only thing the two have in common is the I/O controller, and if it's failed the system will probably never boot anything.
I'd go ahead and read some of the stuff in the link above including the resets they mention. Who knows, it might work.
Good luck and I hope this helped in some way.