Is the drive noisy?
Try running a scan on the drive, most HDD manufacturers have scanning
software for their drives. check their website for the utility
Windows update will not normally cause a drive to fail, it's usually a
faulty drive or BIOS problem (cant say it's impossible though)
After a format reload though, the update is no longer a factor
Your restore disk is an image file not the actual OS and it should have the
option to reload or format and reload, choose the latter, if it still wont
boot then suspect the drive...warranty?