Erase and reinstall MacMini 2009 (Server)

I am trying to Erase and Reinstall my MacMini 2009 (server). I am stuck in an Installating --> failure --> Restart cycle.

The MacMini is the 2009 Server model shipping with Leopard Server. Through the years I have been able to update to Snow Leopard, Lion, Mountain Lion and Mavericks.

I have a full TimeMachine copy of the MacMini with Mavericks 10.9.2.

To Erase and Reinstall I ran the Commmand-R option, erased the two HDDs and chose the option to Reinstall.

At first it said it could not install Mavericks on the machine. It would also not allow a recovery from TimeMachine,

After a Reboot is did allow a Mavericks Reinstall. In the download proces it asked my AppleID to check my eligibility for OSX. Ok.

After completion of the download it started the installation process. At about 10% it stopped with an error cannot install. Try reintalling.

Doing so results in an infinite loop.

When running diskutility I see, aside from the two HDDs, a thrist 'disk' called System Boot (which I cannot delete).

Question: how to go forward? How can I revive the MacMini.