[HD2 Android Q&A, Help & Troubleshooting and Genera] Sneakyghost:
Very good ideas, all of them. Tried them all. Unfortunately, the only known way to overcome the native SD DRM encryption (which this would be) is a Nokia running symbian S3 because that has a security flaw which allows to ignore the encryption and format the card anyway.

Apart from that, the card was not locked because the OP stated that he could read it in his PC.

The "Phones Mass Storage Option" is a very general statement. I would like to clarify, that there is a problem with Magloaders build-in mount, which can occasionally break files, whereas the mount from Recovery is fine. Also, the Android mount usually operates ok provided that it is live of course.

To the OP:

I spent half the day at work thinking about the situation and i can only come up with what i recommended already. Please do this first:

1.) grab a different SD card, best would be class 2, 4 or 6 at most. SanDisk preferably. Better would be to have 2 or 3 cards at hand (borrow some of someone?) Check if they let you install Android on NAND and boot afterwards.

Note: i could not tell from your Post what kind of Android you tried. NAND only? With SD-EXT? in case you tried one having parts of the System on SD-EXT, try to have a ROM that does without the EXT partition. Should be easy on Tmob Device. Suggestion: TBD ROM as i know that one best and could help you with it better. It installs all files on NAND if you format the SD without an EXT partition.

Reading this:

Makes me understand now that you never managed to install ANY android AT ALL? If that is so, ignore the above as it is then clearly not the Android System not booting but only the Recovery not booting! Refer to my statement below regarding the Recovery versions. Sorry, it is already late and i had a long day. I am not very clear at the moment.

2.) if the device does not boot, try to check the SD-Cards for errors. Like HD Tune Pro, run a full check, not the quick one. Takes a long time. I have one card that always breaks files or makes Android go nuts if one particular spot is hit. It has a bad block for sure (SD Cards are NAND too). Unfortunately, i have not found a tool that can determine bad blocks on SD Cards. I can only tell from writing to the full card.

Suggestions

A.) there is a problem with getting stuck when using CLK instead of Magloader occasionally. Have you had that one running or Magloader? Try Magloader if you where on CLK. I just re-read your problem description and understood you where on Magloader already, so this is not the cause.

B.) There is a known problem with certain Recovery variants (5.0.0.26 for sure) causing boot failures randomly or always. Which Recovery where you using? Again, i suggest to try Dansta34's 4EXT recovery port as that one is known to work most of the times. The linked Recovery is configured for TBD ROM US Layout without SD-EXT.

C.) From your Opening post, i can tell that you are familiar with MTTY. Please use MTTY to task29 the phone if you have not done so, as that task adjusts the low level file system (think it's yaffs, or is that only installed later? not sure) around the bad blocks and fixes the redirecting from what i gathered. I am not sure about this information though. This is my hypothesis and i gladly take corrections as i still wonder how exactly task29 does its job. But apparently its good to use after new bad blocks arise.

This is all i can think of for now. Please come back and report your results once you tried some or all of the ideas here.