is there any unformatted space in disk management
http://support.microsoft.com/kb/303013/en-us
what does disk management list for the drive any unallocated space
Well if it worked before, we can assume it is not a BIOS issue with 48 bit LBA either, and XP3 should support LBA. Check your atapi version as Dai suggested above, if it is good then it sounds like for some reason something has cut an HPA. Try HDD capacity restorer from here http://blog.atola.com/restoring-factory-hard-drive-capacity/
The drive cannot be removed if it is the drive you booted from. You can't run the tool against your boot drive, it has to be a slave or secondary disk to be able to run the tool.
Argh... So, what are my options? I have no way to get another desktop, and if I go the route of buying a new HDD then it defeats the purpose of trying to reclaim this one as I have no need for two, and my efforts at this point are to prevent having to get a new one. The best possible thing that I can think of at this moment is to look for a small "used" drive from a local warehouse store that might knock me back about $20-$40, and use that as a slave to run the program and attempt to recover the original set as master.HDD restorer will not work with USB connections, the low level protocols to talk to the drive are not available through a USB connection