Thanks Kemical & Bigbearjedi. I took your suggestions and ran the Seatools. The detail sector by sector scan showed no bad sectors at all. I reformatted the HD and tried to install Win-7 SP1 32 bit DVD (received from MS) I got an error message. This happens after it goes through expanding about half of the files. i.e. "Windows cannot install required files. The file may be corrupted or missing. Make sure all files required for installation are available and restart the installation. Error code 0x80070570".
Just for a confirmation I installed a brand new hard drive. I got the same error message as above. How can I have corrupted files from a new DVD and installing on a new hard drive ?
I talked to ASUS for help, thinking that I may have an out of date BIOS. Their tech help confirmed that even though the motherboard is about 7 years old the BIOS is up to date. I am speculating that maybe - just maybe - some chip in the mobo is failing.
Is there a diagnostics to check the mobo ?
Yet I can restore the existing Win-7, all its applications and data from my backup. One other clue may tell you something. The SFC/Scannow; done in both the normal & safe modes; hangs up with a message that windows could not repair it. Yet the Win-7 restored from the backup runs OK
Its very frustrating to not be able to find out why it cannot update to Win-7 SP1 -- which stops me from upgrading to Win-10 !!
Appreciate any other ideas guys.