Just a thought - how old is the hard drive? Sounds like a hardware controller issue (integrated HDD electronics) or failing sectors on the drive platter is preventing the NTLDR to run / load the OS correctly. I have seen this a few times in the past, the only way the issue was resolved was to purchase a replacement hard disk, install the OS and then transfer user data via USB dock.
As the computer is booting from your Flash Drive successfully the rest of the computer is working as it should, which is good news indeed.