It is my understanding of computers that if the cable is not working correctly that the drive would either not work at all or the error wouldn't be the same

Actualy, a problem with the cabling could result in any number of random errors, each completely different.

if it was intermitten since it wouldn't make sense for the cable to fail only when reading from a certian part of the drive.

If you're sure that the disk drive is failing only on a certain part of the drive, then I think you might be right about that. If it's always in the same spot, I too would suspect a faulty disk drive. How do you know it's always in the same spot?

Since you said you had cabling trouble in the past, I wouldn't rule that out yet. Make sure it's all crimped right like in the new pictures I added to the FAQ within the last day or so.

I have used the builder image and it doesn't seem to be working as my custom start screen shows up everytime I boot.

Have a look through the disk upgrade guide for instructions on how to properly use it. If there's already data on the disk, you need to press the Enter key in Hyperterminal at the right moment to make it work its magic.