Cannot System Restore Error: 0x80070570

I bought my HP Pavillion dm4 about a month ago and until recently, it had been working great and really fast while on the internet. Then lately, it started to load normal pages at half its speed, taking time to even load google. When playing MMOs like World of Warcraft, I was a lot laggier than i normally am, dropping framerates by 30-40 per second, even though my task manager said nothing else was running in the background. I thought something was wrong and my suspicions were correct after i found my WoW account to be hacked. I managed to recover my account and change the user/pass but my computer was still slow so i suspected that it was a virus. I uninstalled Norton Antivirus because it couldnt pick up on anything and got Sunbelt Vipre to try and solve the issue. Unfortunately, Vipre didn't pick up on anything either. I wanted to try to System Restore to remove any sort of keylogger or virus that was causing my computer to be so slow and hack my accounts. But when I tried to do the restore, picking the nearest restore point, it was stuck at "Initializing System Restore..." for nearly 3 hours. I had to hard reset the computer and try again at a different restore point, but I got the error message, "System Restore did not complete successfully. Your computer's systems files settings were not changed. The file or directory is corrupted and undreadable (0x80070570)." Then after clicking Run System Restore it gives me the error message "There was an unexpected error: Catastropic failure (0x8000FFFF)" I've also tried the following:

-CheckDisk in safe mode, using command prompt as admin, and checkdisk at startup (this one took the longest, nearly 4 hours, and when i woke up the next morning i hadnt seen any changes)
-Defrag in safe mode and normal (either way it would get stuck on 79% Analysis and then freeze), I managed to get defrag to work after a few resets and after disabling my antivirus/firewall. Still it did not make a difference and I was still unable to System Restore.
-SFC using command prompt as admin

Please help as I really cannot afford to buy another computer and other than the fact that it is running at half its speed and cannot system restore, the computer is able to function normally.

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