Is that after running it from the recovery options command window? Try running this command from the recovery options command window,
dism.exe /image:C:\ /cleanup-image /revertpendingactions
Restart the computer, then try running sfc /scannow again from the recovery command window.
If that fails to work, or it freezes up again, here are your options. Both will involve reinstalling the OS.
The bad sectors on your hard drive are the result of one of two things. One, the data has been overwritten too many times and is now unreadable. If that is the case, you can use GParted (http://gparted.org/download.php) to wipe the hard drive. Download and burn it to a CD, then boot from the CD. Delete all the partitions from the hard drive. Then go to the command line option in GParted and enter shred -z -v /dev/xxx (EDIT: I realize I forgot to explain that xxx should be replaced with the drive name as it appears in GParted, usually sda.). That will completely erase the disk and ensure the bad sectors won't affect the new install -- if it is just a case of too many overwrites.
More GParted documentation here: http://gparted.org/index.php
Then download a Windows 7 iso (which version are you using? I can send you the link if you don't already have an install disk), burn it to a DVD, and install the OS. You'll need the Windows product key located on the sticker somewhere near the back of the PC. When prompted for the key, enter it. You may have to activate Windows by phone. Instructions on how to do all that: http://answers.microsoft.com/en-us/windows/forum/windows_7-windows_install/can-an-oem-licence-key-be-used-to-activate-a/495b4da1-c1b7-4d93-82a9-8c8601bbaf32
However, bad sectors can also result from a faulty hard drive -- the fact that your computer keeps blue screening on the Intel controller driver for your hard drive leads me to believe that may be the case. If so, you'll have to replace the hard drive and reinstall the OS, following the instructions above.
More on hard drive bad sectors: http://www.howtogeek.com/173463/bad-sectors-explained-why-hard-drives-get-bad-sectors-and-what-you-can-do-about-it/
Edited by sflatechguy, 19 July 2014 - 04:33 PM.