IBM T61p – Windows not loading

I’ve got a T61p IBM laptop which has a password protected HDD. Last night, once I enter my password to the HDD, i get the following error message: Cannot locate the C:\WINNT\system32\config\system.
I tried to repair this error using Windows XP CD. Later, I get the message – Unable to load the operating system.
Please advise what does this mean and how can I resolve this issue.