try to install it in Windows Vista compatibility mode. (which you can do by right-clicking on the setup program for Far Cry 2 and go Properties > Compatibility
My Computer
Computer Manufacturer/Model Number
Too many to list.
OS
XP, Seven, 2008R2
CPU
AMD, Intel, VIA
Motherboard
Various
Memory
Corsair, Kingston, etc.
Graphics Card(s)
ATI, NVIDIA
Monitor(s) Displays
Samsung
Hard Drives
Maxtor, Western Digital
Keyboard
qwerty
Internet Speed
22 Mb/s @ home, 1 Gb/s @ server
Other Info
All of my systems still run fastest on XP 32-bit for the most part. Win7 is fun to play with, but I still prefer XP for raw speed, security, and functionality.
I don't recall needing any compatability mode to install this game. From the error message shown, it does look the media itself may be damaged as you have guessed.
Have you tried copying the disc contents to the hard drive and running the installation from the HDD?
My Computer
Computer type
PC/Desktop
Computer Manufacturer/Model Number
Systems by SmartEyeball
OS
8 Pro x64
CPU
i7 3770K 4.6GHz
Motherboard
ASUS P8Z77 WS
Memory
16GB G.Skill Trident X 2666mhz
Graphics Card(s)
x2 EVGA 780 Ti Superclocked SLI
Sound Card
SB X-FI Surround 5.1 PRO USB / ATH-AD900 Headphones
Monitor(s) Displays
x3 Dell U2410 / 58" Samsung
Screen Resolution
5760*1200/ 1920*1200
Hard Drives
2x Intel 520 240GB (RAID 0) * 2x WD Caviar Blacks 2TB (RAID 0) * 2TB WD Caviar Black * Sony Optirac DVD
Thermaltake Theron (Highly Recommended) + Razer Imperator
Antivirus
MSE
Browser
IE, FF, WaterFox
Other Info
GT Extreme V2 Sim Racing Cockpit + 40" LCD and K/B Mouse stand ▼
Fanatec CSR Elite Wheel + Clubsport V1 Pedals + CSR shifter/7G-H ▼Saitek X52 Pro ▼ TrackIR 5 Pro
Buttkicker v2 Seat Rumbler with Dedicated 5.1 and Sub Woofer attached to frame ▼
=
Bloody Big Grin
I installed that game on my Win 7 x64 Ultimate RC 7100 build w/o a single glitch. I Even played it on DX10.. AWFUL game it was but that is not the point
If copying the contents to the hard drive doesn't work, try to make an Iso and mount the image to see if you can install from there. Don't forget to do so with Elevated Admin Rights (right click file and use Run as Administrator).