Q: Macbook pro won't boot/mount drive

I decided to restart my computer before using it for software instruments, and when it restarted it never booted and stayed on a gray screen with the apple logo and a spinning cog at the bottom. It is a 2009 Macbook pro running Lion, and I have tried a number of things to fix it. I can boot from an external hd to run disk utility. It says it cannot repair the disk, and DU will not mount the disk. When I try to create a new image and save it to an external hard drive, it comes back with an error message "unable to create 'Macintosh HD' (input/output error)"

My gut says that the HD is bad, but when I click "file/open disk image" I can see all of the files on my HD. To me that says that the HD isn't physically damaged, but maybe corrupted.

I tried booting in target disk mode, but no computer would recognize the drive.

I don't have a recent backup (my own fault), and I have quite a few VERY important files on it. Is there anything I can do to get my files back?