Unfortunately, it sounds like the hard drive itself may have failed. If that is the case, then recovering your data could be expensive, or even impossible. Connecting the drive to another computer for testing would probably be needed to verify that. If you have another drive to test with, swapping them is another good way to verify whether or not the problem is with the drive. If the drive is bad, you would need to replace it.
The service manual for the D505 has the instructions for removing the hard drive, whether for testing or to replace it.
The drive itself is, if I am remembering correctly, a standard 2.5" EIDE drive with an adapter to connect it to the system. If you purchase a replacement drive from Dell it should come with the plastics and that adapter. If you purchase a replacement elsewhere you would have to transfer the plastics and adapter to the new drive (not difficult with a small screw driver and a few minutes of work). The biggest thing to to ensure you get a drive that fits in the hard drive bay (2.5" drives come in heights between 9mm and 13mm, and I can't find the info on how tall the bay is on this system).
LarryR
Dell Outreach Liaison