You can telnet and try the ntfsfix command to see if it helps fixing up the corrupted files. The best way/easiest to do what you are trying to do is to let the PBO format your hdd as per usual and then connect your PBO to a computer runnning linux (Lots of distribution outthere bootable directly from CD or USB Stick) and then use gparted (available in many distro (ubuntu is one of them)) to shrink the ntfs partion to almost nothing (You still need it to keep the PBO happy) and then use the room left to create a ext3 partition on the drive.
At the end you should be left with four partition on your drive:
1) linux swap (small partition)
2) linux ext3 /tmp/hdd/root/ (small paritition)
3) NTFS (now a small partition after the shrink process)
4) Ext3 (large partition, the whole disk minus the three previous partition)
You could also create a mount point on your newly created ext3 partition for HDD1 if you want.