Clean install partition not found

I'm doing a clean install of Win7. I have one hard drive with two partitions (lettered C & D) and want to install Win7 on the C partition. When I load Win 7 setup (custom-advance option) and get to the 'Where do you want to install Windows?' screen I only see my D partition listed.

UEFI is disabled in BIOS & my disk is MBR (not GPT). There is a old Win7 install on the C partition that loads just fine & in Disk Management it shows C as 'Healthy-System, Boot, Active, ect...'. The D partition is 'Healthy-Primary Partition'. I've tried both booting from the Windows 7 DVD & starting installation from inside Windows.

Any idea on what's preventing the C partition from showing up in Windows setup?

Thanks for any suggestions.

I did a scandisk on the disk and didn't find any errors. I have everything backed up to an external drive with windows system image. I'm thinking about wiping the disk and re-formating & partitioning it with Partition Wizard, my concern is that setup won't recognize the drive at all after that.
I find it odd that it recognizes the disk but not both partitions.

Thanks for the response. Okay - the drive doesn't have a system reserve on it currently or any unallocated space, so I suppose the Windows installer is trying the use the C partition for this purpose?

I don't think I want system reserve but would like two partitions on the drive, so my game plan is 1) format the drive into a single partition, 2) format it to NTFS, 3) install windows, 4) then create the second partition with PW.

No, I haven't installed Windows on this laptop before. It's an ASUS with an OEM license, so it only came with a restore image full of bloatware. I backed up the license with Advanced Tokens Manager and want to do a clean install of Windows 7.
I didn't see any SecureBoot options in BIOS. The SMBIOS is version 2.6 & I believe SecureBoot came 2.7 and later.

And this is what I get during installation.

I initialized setup in windows to get the screen shot but I've been booting from the disk and get the same scenario showing only my D: but with a few extra options (Delete, Format, New, Extend)

Could there be a problem with SATA Drivers on the Windows dvd? I'm using the retail iso and slipstreamed the Convenience Rollup, Internet Explorer 11, Intel Storage Controller Driver and USB 3.0 support.