ok, well it looks like an OS problem, So there is a few things i would do to save my data.
1: install a working OS that has the NTFS files sytem, and put it in as Master on the 8 gig , and then put in the 40 gig, as slave once boted, try to do a virus scan on the 40 gig for some sorta boot virus, if noen, GOTO step 2
2: if no virus is present, well put everything that is totally nessacary to back up, considerig u only got aobut 6-7 gigs free to back up whatever is on the 40 gig, onto the master 8 gig drive.
Then take out the 8 gig,m set the 40 back up as master, and then format and reinstall the OS and then see if it works
Hope that helps, Post back if it works or if it doesnt so i or anyone else can help.
Have a Great DAy