XMS memory problem

[Nestor]

In my class, i was given a 386 to diagnose and then later upgrade as part of my training. During this training, I Am required to install windows 95 on said 386, which not so daunting a task as i originally thought. The problem is that I have a limited amount of XMS memory, and I have two options availiable to me, both of which failed. The options being Install from a ParaSCSI CD ROM (can't, it eats up my XMS memory and leaves nothing for windows setup)
Or copy the CABS and install from the CABs, which i cannot due, becuase certain errors on my hard drive corrupt the file data. can anyone give me a new agle to aproach this issue?

[query]

What errors are surfacing on the hard drive?

[Nestor]

Well, When i formatted the HDD, it let me know that there was bad clusters. When i later used SpinRite, it identifed the clusters (Most of which it says are irrepairable). I'm beginning to think that a replacement HDD is the best option, but my instructor will make the request for a new HDD an adventure through broken glass, brimstone, and noisy kittens.

[query]

Yes, you need a new drive.  Otherwise, the installation will fail.

[Nestor]

Some new information: My research into this problem says that a low level format will define and 'isolate' the HDD errors... Should I do this?