Defrag received error "Cannot read C: Dr

I would Try the following:
Starting in safe mode,Command prompt only and running scandisk and defrag from there to eliminate the outside chance that a program is writing to the hard drive while scandisk is running.

To start Windows in safe mode
1)Restart your computer by clicking the Start button, clicking Shut Down, and then clicking Restart The Computer.
2)When you see the message "Starting Windows 98," press F8.
3)Choose Safe Mode. Command prompt only
In safe mode.

Also I would try system file checker.
System File Checker (sfc.exe). If System File Checker discovers that a protected file has been overwritten, it retrieves the correct version of the file, and then replaces the incorrect file.

To start System FileChecker, Click Start, point to Programs, point to Accessories, point to System Tools, click System Information, and then click System File Checker on the Tools menu.
Click one of the following options:
1)Scan For Altered Files or
2)Extract One File From Installation Disk.
If you click Extract One File From Installation Disk, you can specify the file you want to extract. Click Settings, choose the configuration you want to use in System File Checker Settings, click OK, and then click Start.

Also, You can try the Error-checking tool to check for file system errors and bad sectors on your hard disk.

1)Open My Computer, and select the local disk you want to check. On the File menu, click Properties. Click the Tools tab.
Under Error-checking, click Check Now.
Under Check disk options, select the Scan for and attempt recovery of bad sectors check box. Try these things before resorting to reinstalling windows.

Hope one of these things help,
Ellis B.

Instead of using a Microsoft product to fix a Microsoft problem go to Norton Utilities. It is a lot more informative than the "Cannot Read from Drive C:" like Microsoft gives.

Also, if you have McAfee 4.5 installed, this will cause the problem.There is a bug in 4.5 that crashes the computer during defrag. The only solution right now is to disable McAfee. For some reason if you "End" Mcafee the problem still happens. It is most likely caused by a memory resident scanning piece. You actually need to leave Mcafee running and tell it to disable the system scan. To disable, just right click on the V-Shield in the system tray and uncheck everything under "enable"

You can also try running scandisk from a straight prompt by booting to safe mode command prompt only. Here is the syntax scandisk.
/AUTOFIX

Fixes damage without prompting you first. By default, if you start ScanDisk with the /AUTOFIX switch andScanDisk finds lost clusters on your drive, it saves the lost clusters as files in the drive's root directory. To have ScanDisk delete lost clusters rather than saving them, include the /NOSAVE switch. (If you use the /AUTOFIX switch and ScanDisk finds errors, it still prompts you for an Undo disk; to prevent this, include the /NOSUMMARY switch.) You cannot use the /AUTOFIX switch in conjunction with the /CHECKONLY or /CUSTOM switches.

/CHECKONLY
Checks a drive for errors, but does not repair any damage. You cannot use this switch with the /AUTOFIX or /CUSTOM switches.

/NOSAVE
Directs ScanDisk to delete any lost clusters it finds. Can be used only in conjunction with the /AUTOFIX switch. (If you start ScanDisk with the /AUTOFIXswitch and omit the /NOSAVE switch, ScanDisk saves the contents of any lost clusters as files in the root directory of the drive.)

/NOSUMMARY
Prevents ScanDisk from displaying a full-screen summary after checking each drive. (This switch also prevents ScanDisk from prompting you for an Undo disk if it finds errors.)

/SURFACE
Automatically performs a surface scan after checking other areas of a drive.