Serious Compaq System Recovery Problems - Please Help!!!

I have a Compaq Presario - not sure what model but it's a few years old (low mileage - home computer). It has Windows XP Home Edition. Computer would not restart. It would freeze at "restoring your settings". Put computer in recovery mode at start up, and password would not work. Put in the System and Application Recovery CD and am given three options. Keyboard is somehow disabled at this point as I press "R" and nothing happens. Now all I get is a small blinking " -" (like a dash) in the upper left hand corner. I turn off the computer, turn it back on and see the initial Compaq options like press F10, but then it goes to the blinking dash and does not respond to any keyboard commands. Please help! THANKS>