hardware,operating system problem

I have DELL VOSTRO 220 DESKTOP WITH VISTA,it was working fine.Last week when i started i found that after DELL logo screen the next window was blinking cursor at the top left corner.I tried to reinstall the OS but cd-rom can't read the media.when I hit F12 button nothing is happening.Finally I tried Diagnostic it worked the result says there is no hardware or memory problem.
what is wrong? anybody can help I will really appreciate. Thanks.

If you have a Repair disk for the machine, you can boot to that and see if you can do a System Restore to a day previous to the failure.