The first thing I would try is swap out the PSU, It sounds like that is the problem. Either that or the board itself is toast. That Is a Gigabyte board Probably this one
A 10 gig hdd would be fine to start with.
Edit* I think that board is OEM, Maybe Packard Bell, It might be better to get the drivers from the OEM.
To try linux I would suggest Feather Linux, Its a Knoppix remaster, is very small and everything you would need for what that PC is going to do. After you Download and burn the iso just boot it as a live cd then when you are in the GUI, just select hdd install and you will be very pleased.
Sorry for all the Edits
Get Feather Here