Can't Reinstall OS X - is my hard drive shot?

I have a mid-2011 27" imac running Mavericks (10.9.1).
Recently the machine has been performing random resets with no warning, which I got tired of, so I tried to repair the disk but disk utility was unable to do it. Figured this was either an OS problem or a hardware problem.
I had good backups of all my data so I decided to completely wipe the disk and start over. I zeroed the disk using one of my backups as the boot drive.
When I went back into internet recovery mode, all seemed fine at first. The computer reset and started to try to reinstall Mavericks. However, it gets halfway into the install, then pops up an exclamation point and gives me a big error message that says "unable to install OS X."  No further details. It's done this a few times.
I assume this means I have some kind of fundamental problem with my hardware and need a new drive. Is there any other possibility?  Would there be any utility to trying to install OS X onto the drive after booting off my external backup clone?  I don't even know if I can do that - the only way I've ever reinstalled OS X is through disk utilities when in recovery mode.
If the hard drive is dead, is it worth trying to put in a new drive myself?  Or should I just scrap the whole thing and get a new computer?  I've done other hardware work on my older computers in the past, but my understanding is that there are some idiosyncrasies about these mid-2011 imacs (like the fan speed/heat settings) that make this more challenging.

You should be able to boot into your external clone, use that Disk Utility to erase the internal drive (again), and then clone back your entire system.
I don't know if you can get to install the OS via recovery now; you should have been in the recovery partition while erasing the drive and then immediately installing the OS. When you erased the hard drive, you might have erased the hidden recovery partition as well - I'm not sure about that though.

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