Original Xbox 360 Elite 120GB - Corrupt Hard drive?

Hey,
I first started noticing in the last 3 days my console was completely freezing up fairly often. (Before hand it'd probably only freeze up once in a blue moon sorta thing)
Then this morning I went to open the Youtube app and once again it froze, so I restarted it and received a 190MB system update (Roughly 10am, 3/4/2013 here in New Zealand).
I believe it was an update for the GFX driver if I remember correctly?
Went to try and download it & it tells me I don't have enough memory (which I thought really odd consider I had about 5GB spare).. Went to System Settings, then Storage & my hard drive icon in the middle of the screen it said 'Unformated' and only had either 'A' to select 'B' for back and 'Y' for Format.. I selected it & the only option I was able to select was 'Format.' (the other options were grey'd out). & also since it can't access my hard drive I have no arcade games or profiles available.
So I rang up the helpline & we tried a couple of things like disconnecting the hard drive then putting it back in and starting it up again.. then tried again with the internet cable disconnected.. then again without the hard drive attached..
The only other option I was told to try out was trying the hard drive to another 360 console.. Haven't heard back from my mate yet to try it! lol.
The phone operator I spoke to said it "your hard drive could possibly be corrupted." but he wasn't sure.

Couple of questions:

Is my hard drive is corrupted?

This 'problem' would've been a product of the freezing I'm guessing & not the small system update I received, correct?

 If my hard drive is corrupted is there any way at all it can be trouble shoot'd or accessed in order to find out what about my hard drive is corrupt? And possibly resolve the issue?
(I have a big save file for Forza 4, which is the only game save I'm hoping is possible to recover. Due to the fact I have a large collection of Collectible cars that can only be sent to you by the Devs which I worked really hard to earn since its release which is just over a yr) Help?

Really want to know how many options I have with this issue..

Side question:
I can't quite remember what I've stored on my iCloud with my game saves, if I contact the people who look after iCloud would I be able to find out what I do have saved? I'm not sure who to contact for this question.. you guys or who ever looks after 'iCloud..'
 
Brief console history:
Bought  brand new in 2008, in the first yr of owning it I had to get sent away twice.. 1st issue being it would freeze on the Xbox logo when it started up. & the 2nd time it was for 2, maybe 3 red rings (which I believe they just fixed the heat sinks within the console).
 Since then until now my Xbox 360 has been absolutely golden & have thoroughly enjoyed it! Also impressed that since I last got it sent away that it's continued to push on well for almost 4 yrs.

MFR Date: 2007-10-10
Serial number: [Mod Removed]
Color: Black

Thanks for reading =)
WHRAMI