You might be onto something there... I fixed a slim last night that had a dodgy HDD. It would copy over the firmware, but stall for a bit at 99%. Then it would ask for a valid version of the firmware and keep looping like this. With a fresh, formatted HDD it had no problem. Would not accept the original HDD, even after I nuked the partition table. Should have been obvious, seeing as some nasty noises were emanating from that HDD.
I'll grab a new HDD on my way home from work and try this same technique on my ol'Infected-fatty.