MacBook Pro 2009 original hard drive not booting internally, but reading and booting externally

My MacBook Pro 2009 (Mac OSX 10.6.3 Snow Leopard) 250GB original Hard Drive failed. Upon rebooting, I got the flashing question mark and folder. I read the forums and;

• Tried fixing using the original installation disc and searching for the Hard Drive, to no avail.
• Tried verifying through Disk Utility - it couldn't find the hard drive.
• Removed, plugged-in and found the Hard Drive on an independent Mac.
• Tried a completely independent Hard Drive in my own Mac and it saw it straight away, ready to install.
• Attached my Hard Drive to a usb and plugged into my mac and found it straight away.
• Then re-installed back inside my Mac, but it still cannot see the Hard Drive to re-install.

I am currently writing this on my Mac which is being powered by my Hard Drive, yet plugged in via external usb.

Talk about confused. Does anyone have any ideas what it might be? I'm not particularly IT savvy so any help is greatly appreciated.