System frozen, completely unresponsive, doesn't sound like bad sectors on a non-system volume. A hard lockup might be a kernel mode driver. You mentioned a reinstall of W2k3 server. What about the chipset drivers, specifically IDE & SATA drivers?
All other motherboard firmware is up to date?
What about drive firmware?
Configuration such as UDMA modes, disk translation choices?
Any BIOS disk test results (if available)?
What does the manufacturer's non-Windows disk diagnostic software report?
S.M.A.R.T. messages?

About controlling Winrot. I've used a second scratch machine or now virtual machines. No software is intsalled on the "production" host until it has passed a trial period on the scratch box or the VM. I haven't reinstalled a main host in years. With slipstreamed installation media or network installs, reinstallations into a VM are reasonable.