Tried updating Macbook to Yosemite - drive crashed - now trying to reinstall Lion on new drive but it is 'temporarily unavailable' HELP PLEASE

Last night, I tried updating my Macbook to Yosemite. It crashed mid way - telling me the drive needs repairing.
I am now following these instructions below. I backed up all of my work before the update, however not my iTunes / iPhoto. I would like to do this. My next step is to reinstall Lion on my external hard drive however it is 'temporarily unavailable'.
Does anyone know a way around this? I assume you can no longer install Lion cos Apple move so quickly.
These are the instructions I am following at the moment :
Installing Mavericks but disk damaged, no recovery or safe modes
Help appreciated!

I don't understand why some online forums are saying to click "erase." This is a brand new external hard without any files on it.
Just use Disk Utility to erase the drive.  Select HFS+ (Journaled).  It should then become a Mac HFS+ drive.
Also, if I use time machine, will my files be deleted off my computer and only saved on the external hard drive, or will it still be on my computer as well as the external hard drive? I have never backed up my files, so please explain to me what I should do and whether I will have files in both places.
TM is for backing up stuff.  It woudn't make much sense to be a "backup" if it deleted the originals of the stuff it was backing up would it?  So you end up with the source (original) stuff and the destination backup.
Lastly, if I am thinking about updating my software to a newer version (such as OX lion) is it better to back up files now or wait till after I update the software? I am not sure if it makes a difference.
I always say never ever update your system without a backup to fall back on in case something should go wrong with the update, and in the case of lion, you don't like it, and want to go back to Snow Leopard.  So yes, it makes a big difference!
Update:
The following is for 10.4 but it's good enough to show you the erase operation in disk utility:
Erasing a disk or volume
You might also want to look at this:
Format Your Hard Drive Using Disk Utility
Finally, TM isn't the only way to back stuff up.  There are many 3rd party backup utilities as well. Two of the more popular ones are Cabon Copy Cloner and Super Duper.

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