Can you enter the bios?
F2 key usually gets into the bios, however, you may need to look at dells website in case the button isn't F2.
Ensure that it is detected correctly.
If the grinding problem persists, it's likely the HD is gone.
You can remove the HD and stick it in a USB->HD case, which may be all of US$15, just to check it.
It may also be a corrupted file system, although I doubt it if the HD makes a grinding noise.
Can you also confirm that the grinding noise IS the HD and not the cdrom.
Failing that, it's time to either upgrade the laptop of buy a new HD, it's only $120ish US for an 60-80GB / 8MBcache 2.5" 5400rpm HD.