can you try a few things: - do a raw dd command to the disk from /dev/zero and see if that works, e.g. dd if=/dev/zero of=/dev/hda
- turn off UDMA, in fact turn off ALL dma at first - try to make it run totally PIO
This is weird, but it does seem like some kind of DMA problem.
Also, boot under the normal bios and do an lspci -xxx and then do an lspci -xxx under linuxbios and see if you see any IDE setup differences.