Locked disk. Please Help

I really got myself into a situation here. Following an online guide, I attempted to do a clean install of Lion. From the Lion install App I retrieved the Install.dmg file and copied it onto a USB thumb drive. I erased the main harddrive using the disk utility and rebooted. Upon reboot, I am immediately brought to a Mac OS X Utilities dialog box. There are 4 options, one of which is Reinstall Max OS X. When I attempt to install the OS, the disk drive is grayed out and reads as locked. I am not able to reinstall the OS!!
Any help please!!
Thank you

You should see if it does the same thing when you boot to the Restore partition (Command R at boot) and also try booting to the USB thumb drive by holding Option at the startup and choosing your external USB thumb drive.

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