STOP: ox0000007E (ox80000003,ox8053331E,oxF7A6550C,oxF7A65208)
The 07e is basically a RAM error. While you MIGHT have some bad RAM more than likely you've encountered a memory crash which is verily suggested by the rest of your remarks.
You can use a lens cleaner for the drive itself and stick the System Restore disc in another machine. It doesn't have to do anything, it's just a test to see if the disc can actually be read. If you get the label info and some folder info in windows explorer it's a safe bet that the problem is actually in the laptop.
The other four sets of numbers is most likely the software id of the (drivers) that were in play at the time of the error.
The bad news is that you probably have a virus that destroyed the system info on the drive and prevents recovery by blocking the read function on the CD/DVD drive.
The next step is to see if you can get a disc boot with the HD disconnected.