There would be two places I would put my money on: Either a bad processor, or a bad or unstable power current from the outlet. Have you tried any other outlets, maybe in a diff room? I had that problem before and had an extension cord running across the hall before I could have a change to pull the drywall and rewire it.
and the only way constant restarting could damage the hdd, is if the read head got pinged off the side, or if it sent bad power to the hdd.
The last thing I can possibly think of is that maybe the motherboard is shorting to the motherboard tray.
and lastly, I've heard of this happening: have you tried any other monitors, mice, keyboard, unplugging any un-needed peripheral devices and booting? because the internal circutry could be shorting and triping something to make it restart or if your keyboard has a power button on it and it is shorting