Error 0x80070017 when installing Windows 7 via Boot Camp...

I've been trying hard to research this issue and haven't come across anything that has worked for me.
At work, we have an iMac (Early-2009) that we wish to install Windows 7 on. Previous user has left, so I reinstalled Snow Leopard (10.6) and used Disk Utility from the disc to reformat complete to GUID single partition Mac OS Extended (Journaled), which is pretty standard for Macs. Mac OS X installed and booted just fine. I updated completely to 10.6.8 and all other updates. Only installed Microsoft Office 2011 and Firefox.
So Boot Camp begins...
Found that the early-2009 model doesn't "support" Windows 7 64-bit, so we are fine going with 32-bit. The 32-bit Windows 7 disc has been used to install Windows 7 using Boot Camp on 2 Mac Mini's (one Intel Core Duo, the other one Intel Core 2 Duo) just a few days ago.
Opened Boot Camp Assistant, partitioned the 1TB drive equally, inserted the Windows 7 disc, and clicked Restart.
It boots from the Windows 7 disc, I go through the options, choose the BOOTCAMP partition and format it (I assume Windows 7 is choosing NTFS for me). Click next.
It copies the files instantly, but then "begins" to Expand the files. It remains at 0% for 5-10 minutes (I can hear the Windows 7 DVD spin down and spin up, but mostly spin down). That's when the error hits:
"Windows cannot copy files required for installation. The files may be corrupt or missing. Make sure all files required for installation are available, and restart the installation. Error code: 0x80070017"
I click Ok and cancel the install. Restart and boot back into Mac OS X. And here I am.
Important Notes:
I've tried multiple times with a 64-bit disc as well. I will likely go check out another 32-bit disc from our software department, but I know this disc works on other Macs.
This issue occurred a month back as well when we attempted to install Windows 7 via Boot Camp (so before the hard drive and OS were reformatted and reinstalled). I was hoping reformatting and reinstalling the Mac OS X would solve the issue.
The Superdrive appears to be working just fine.
I read somewhere that I need to use repair disk to fix it. Does anyone know if I can repair disk a NTFS partition? Or am I suppose to repair disk the parent drive itself? The place I read it wasn't specific AT ALL and the forum was closed and I couldn't find a way to get a hold of the person. It just said "Repair disk did the trick". People, if you find a solution to your own problem, POST the solution!
Thanks in advance!

Yea, I saw that kb article. I verified we have the early 2009 iMac. It's an iMac 9,1 (3.06 24-inch, A1225).
As far as different hardware, I really don't think so, but I'll have to double check with my fellow employees. The specs all match up, but I'll see if anyone remembers having to replace hardware or send it into Apple.
I did think of trying an external DVD drive too, I'll see if I can scrounge one up. I'll post if it works or not.
The employee using the machine knows Windows, but is willing to learn the Mac OS X. Diversify your experiences I always say!
An added note to the Repair Disk "solution". Turns out you can't run Repair Disk on NTFS partitions or the parent hard drive that contains that partition, which makes since. I can only run Repair Disk on the HFS+ partition which did no good. (This is, of course, from booting up using a Mac OS X Install DVD).
Mac_Win, thanks for the suggestions!

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