Unable to reinstall OS X Mountain Lion

I am attempting to reinstall Mountain Lion. My MacBook Pro would not bootup last night, I received a grey screen and then it would just shutdown.
1. I tried removing the battery and keeping it plugged in, and the machine did the same thing.
2. I am unable to boot in Safe Mode (Holding left Shift key)
3. I tried resetting PRAM, still receive the same issue
I am able to access OS X Utilites Command+R and also boot up to the recovery partition by hold the Option/Alt key.
Unfortunately, none of these utilities are able to do anything. It cannot repair the disk (Keep in mind, I have no DVD to use). When repairing the disk I was instructed to reformat and reinstall the OS. That is fine, I have everything back up on a separate drive. 
However, when attempting to reinstall the OS X (From either partition) I receive the following message.
"An error occurred while preparing the installation. Try running this application again."
Any ideas what could cause this? Is there another way to restore/reinstall my OS?
Thanks!

bberrelez wrote:
I am attempting to reinstall Mountain Lion. My MacBook Pro would not bootup last night, I received a grey screen and then it would just shutdown.
1. I tried removing the battery and keeping it plugged in, and the machine did the same thing.
2. I am unable to boot in Safe Mode (Holding left Shift key)
3. I tried resetting PRAM, still receive the same issue
I am able to access OS X Utilities Command+R and also boot up to the recovery partition by hold the Option/Alt key.
It cannot repair the disk
When repairing the disk I was instructed to reformat and reinstall the OS. That is fine, I have everything back up on a separate drive. 
"An error occurred while preparing the installation. Try running this application again."
Erased disk. Verified the disk and said that it was ok. Attempted to re-Install, still gave same message
Ok, do this
1: Your going to need another 10.8 Mac with admin access to copy their Recovery HD to USB.
http://osxdaily.com/2011/08/08/lion-recovery-disk-assistant-tool-makes-external- lion-boot-recovery-drives/
https://support.apple.com/kb/dl1433
2: Select Disk Utility and select your hard drive on the left side top
3: Click Erase and use the middle selection (very important), Erase and wait, it will take some time.
4: Check the Partition, that the option is GUID and format is OS X extended journaled. Change this to MBR and MSDOS and Apply, then change it back to GUID and OS X extended journaled and apply.
We want to double make sure you get a new GUID partition table.
5: Quit and reinstall 10.8 from Apple's servers with your AppleID and password.
6: Reboot and setup with your same name as before, install programs from fresh sources and files from backup manually.
I don't advise TimeMachine restores after going through all this, pick files indivudually to restore.
What your basically doing is the ultimate install, blanking a entire drive like it was new from the factory and starting over.
The middle secure erase feature doubles as a method to check for bad sectors on the hard drive and maps them off before OS X or critical files laid.
If your hard drive still has problems after this, then it needs to be replaced.
2008 machine is too old to be running 10.8 in my opinion, it's almost 5 years old and on it's last legs.
10.6.8 should have been as far as it went.
Why is my computer slow?
How to revert your Mac to Snow Leopard
https://discussions.apple.com/community/notebooks/macbook_pro?view=documents

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