Try repeatedly tapping F8 at boot and see if the Recovery Environment has been recovered.
You will get a Repair your computer option. Try that first and see if it can fix the boot sectors.
It's likely you have a hidden Recovery Partition on the main Hard Disk Drive (Disk 0).
C: is just a partition on it.
It's possible you could format just C: but you might accidentally format the whole drive, including the Recovery Partition.
I'm not sure it's the problem anyway.
System Recoveries doesn't always work. Another option is to try it again.
You can also burn a clean copy of W7 to a blank DVD on a working computer. Do this while eRecovery is trundling away on the broken machine.
The DVD also has a copy of the Repair your computer Recovery Environment or you can use it to install Windows 7 and forget about eRecovery. (assuming you have the W7 License Key on a label on the PC)
(scrolldown to your correct English USA iso version)