Can a faulty SATA controller damage a hard drive?

I had a hard drive start to act very strangly (slow copies, random disconnects, etc). After a great deal of testing, RMAing, etc; I found that the controller on the motherboard was at fault, and that it was causing false positives on drive scans (alwasy reporting a ridiculous number of bad sectors, no matter what drive was tested on the controller).

I currently have the hard disk attached to another controller while I wait for a new motherboard. The odd thing is that while I can access old files on the hard drive, and even add new files to the drive; I cannot read new files off the drive. I get a forever calculating “copy time” dialog. It never goes anywhere and the hard drive LED stays almost steady.

Can a faulty SATA controller damage a hard drive like this? How can I put the drive back in a fully functioning state (without format)? Is it even possible?

Is possible that a faulty controller can damage a hard drive, or at least corrupt its data.  Now that you installed the drive in another controller you may confirm this by running a diagnostics to it: