Since there are still not a lot of good suggestions on solving this problem out there on the Google, I thought I would add an addendum on how I solved it.
In my case it turned out to be a problem with the disk itself that is undetectable by CHKDSK or by the SMART routines on the HDD. This results in the drive appearing to be dirty even after it has been thoroughly checked. There may be some interaction between the disk problem and a registry corruption as well.
If I boot to a Vista disc and use the repair options to restore the registry to an earlier date, I get a "registry corruption" error and the restore fails. This happens to all the restore points that I have tried and in spite of numerous successful CHKDSKs. However, if I image the drive to a new HDD, that new HDD boots and runs just fine (oops, I can't remember now whether I had to go back to a restore point or not). So, the solution is, as Atlanticjim suggests above, image--> new HDD --> profit.
The old drive on this machine is a Samsung and I've run it through their diagnostic. After a full surface scan, the diagnostic suggests that the drive be reformatted to see if that fixes some problem that it does not specify. If this were my drive, I would ditch it, it's old, it's got some mysterious problem and is not worth the risk of my data. I'm doing the same for the customer.
