I have had the same promlem before....if formating the hard drive doesn't work...try another hard drive...
But did you run Microsoft's Scan Disk, or some other utility, to map out the bad sectors after reformatting the HD?
Depending upon the method you used to reformat, the bad sector table may not have been updated during the formatting. It only takes a few bad sectors to pooch the process of reinstalling any OS.
I had a PowerBook G4 (a laptop) on which I was trying to reinstall Tiger...but the reinstall would go belly-up about halfway through, despite the fact that I did a quick reformat of the HD before hand. It was only after I ran the Mac OS Disk Utility-->Erase-->Zero out data that I could get Tiger to reinstall. Zeroing out the data in the Mac environment takes a long time, but it fully updates the bad sector table on the HD. Once all the bad sectors were mapped out, Tiger reinstalled without a hitch.
Just my $0.02.
--Two Shoes
My other hard drives are all under 3 gigs. I guess I'll have to blow the dust from one of them and try.