Your xbox will boot with nothing on the hard drive using an evox boot disk. Granted there is nothing mechanically or electrically wrong with it.
The bogus folder file idea sounds good as it pushes the root file directory further out onto the middle on the disk possibly making it easier to read.
cd-r's and cdrw are very unreliable on the xbox.
If you are certain you have a good evox boot disk keep power cycling your xbox until it finally reads the disk and boots into the evox dash.
You will never FTP into the xbox unless Evox boots.
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woulda, coulda, shoulda backed up your entire C partition first and then, imho, replaced your original hd with a new one... keeping the original safe
unless you can afford to risk the cash to replace it or the headache it might take to get it working again this is highly recommended.