Linux Mint won’t run virtualbox

I installed Linux Mint 11 Katya with Virtualbox 4.1 once and all was running fine. Then I reinstalled system, and I have a lot of software installed too (including Wine). But when I went through the same steps to install Virtualbox, it failed on launch with these two error dialogs:

Failed to open a session for the virtual machine w7.
The virtual machine 'w7' has terminated unexpectedly during startup with exit code 1. Details:
Result Code: 
NS_ERROR_FAILURE (0x80004005)
Component: 
Machine
Interface: 
IMachine {5eaa9319-62fc-4b0a-843c-0cb1940f8a91}

And another error window:

VirtualBox - Error In suplibOsInit
Kernel driver not installed (rc=-1908)

The VirtualBox Linux kernel driver (vboxdrv) is either not loaded or there is a permission problem with /dev/vboxdrv. Please reinstall the kernel module by executing

'/etc/init.d/vboxdrv setup'

as root. Users of Ubuntu, Fedora or Mandriva should install the DKMS package first. This package keeps track of Linux kernel changes and recompiles the vboxdrv kernel module if necessary.

All steps to resolve the error didn't work.
running /etc/init.d/vboxdrv setup as root gives me:

 * Stopping VirtualBox kernel modules                                    [ OK ] 
 * Uninstalling old VirtualBox DKMS kernel modules                       [ OK ] 
 * Trying to register the VirtualBox kernel modules using DKMS           [ OK ] 
 * Starting VirtualBox kernel modules                                           
 * modprobe vboxdrv failed. Please use 'dmesg' to find out why

Also, I see on my update manager after adding the Virtualbox repo that all downloads from Virtualbox failed.

Any ideas? I really really don't want to reinstall system… I also purged and manual deleted Virtualbox installation (except the group vboxusers) before trying again.

Messages from reinstalling:

addgroup: The group `vboxusers' already exists as a system group. Exiting.
 * Stopping VirtualBox kernel modules                                                                            [ OK ] 
 * Uninstalling old VirtualBox DKMS kernel modules                                                               [ OK ] 
 * Trying to register the VirtualBox kernel modules using DKMS                                                   [ OK ] 
 * Starting VirtualBox kernel modules                                                                                   
 * modprobe vboxdrv failed. Please use 'dmesg' to find out why
Setting up libhal1 (0.5.14-5+svn1) ...
Setting up libsdl-ttf2.0-0 (2.0.9-1build2) ...
Processing triggers for python-central ...
Processing triggers for libc-bin ...
ldconfig deferred processing now taking place

dmesg output (last lines only, repeated very many times on log):

[21630.591769] ata3.01: status: { DRDY ERR }
[21630.591770] ata3.01: error: { UNC }
[21630.642637] ata3: nv_mode_filter: 0x3f39f&0x3f39f->0x3f39f, BIOS=0x3f000 (0xc6c500) ACPI=0x3f01f (600:20:0x1c)
[21630.742626] ata3.01: configured for UDMA/100
[21630.742641] ata3: EH complete
[21632.333286] ata3.01: exception Emask 0x0 SAct 0x0 SErr 0x0 action 0x0
[21632.333290] ata3.01: BMDMA stat 0x65
[21632.333293] ata3.01: failed command: READ DMA
[21632.333300] ata3.01: cmd c8/00:08:52:ae:06/00:00:00:00:00/f1 tag 0 dma 4096 in
[21632.333301]          res 51/40:00:55:ae:06/40:00:01:00:00/f1 Emask 0x9 (media error)
[21632.333303] ata3.01: status: { DRDY ERR }
[21632.333305] ata3.01: error: { UNC }
[21632.384184] ata3: nv_mode_filter: 0x3f39f&0x3f39f->0x3f39f, BIOS=0x3f000 (0xc6c500) ACPI=0x3f01f (600:20:0x1c)
[21632.484163] ata3.01: configured for UDMA/100
[21632.484178] ata3: EH complete
[21634.074790] ata3.01: exception Emask 0x0 SAct 0x0 SErr 0x0 action 0x0
[21634.074794] ata3.01: BMDMA stat 0x65
[21634.074798] ata3.01: failed command: READ DMA
[21634.074804] ata3.01: cmd c8/00:08:52:ae:06/00:00:00:00:00/f1 tag 0 dma 4096 in
[21634.074805]          res 51/40:00:55:ae:06/40:00:01:00:00/f1 Emask 0x9 (media error)
[21634.074808] ata3.01: status: { DRDY ERR }
[21634.074810] ata3.01: error: { UNC }
[21634.125716] ata3: nv_mode_filter: 0x3f39f&0x3f39f->0x3f39f, BIOS=0x3f000 (0xc6c500) ACPI=0x3f01f (600:20:0x1c)
[21634.225706] ata3.01: configured for UDMA/100
[21634.225720] ata3: EH complete
[21635.808000] ata3.01: exception Emask 0x0 SAct 0x0 SErr 0x0 action 0x0
[21635.808005] ata3.01: BMDMA stat 0x65
[21635.808008] ata3.01: failed command: READ DMA
[21635.808014] ata3.01: cmd c8/00:08:52:ae:06/00:00:00:00:00/f1 tag 0 dma 4096 in
[21635.808015]          res 51/40:00:55:ae:06/40:00:01:00:00/f1 Emask 0x9 (media error)
[21635.808018] ata3.01: status: { DRDY ERR }
[21635.808020] ata3.01: error: { UNC }
[21635.850599] ata3: nv_mode_filter: 0x3f39f&0x3f39f->0x3f39f, BIOS=0x3f000 (0xc6c500) ACPI=0x3f01f (600:20:0x1c)
[21635.950574] ata3.01: configured for UDMA/100
[21635.950592] sd 2:0:1:0: [sdb] Unhandled sense code
[21635.950594] sd 2:0:1:0: [sdb]  Result: hostbyte=DID_OK driverbyte=DRIVER_SENSE
[21635.950597] sd 2:0:1:0: [sdb]  Sense Key : Medium Error [current] [descriptor]
[21635.950601] Descriptor sense data with sense descriptors (in hex):
[21635.950603]         72 03 11 04 00 00 00 0c 00 0a 80 00 00 00 00 00 
[21635.950610]         01 06 ae 55 
[21635.950614] sd 2:0:1:0: [sdb]  Add. Sense: Unrecovered read error - auto reallocate failed
[21635.950618] sd 2:0:1:0: [sdb] CDB: Read(10): 28 00 01 06 ae 52 00 00 08 00
[21635.950625] end_request: I/O error, dev sdb, sector 17215061
[21635.950648] ata3: EH complete