Yes, bad news. Drive is toast since the raking sound you hear is likely a loose/broken read/write head scraping the magnetic disk! Turn it off right now, and keep it off.
I was hoping it just could not boot PC anymore, because that happened to one of mine once (a critical Windows file was damaged and could boot PC and could not be re-written. ) Drive was OK otherwise, so using baby/puppy Linux on CD to boot PC worked, and ALL personal data was recovered this way onto a plugged into PC, USB drive. Whew.
Had to install a new drive in its place, and this was when we got back up disks from HP, so installed Windows and other HP back up disks Good as new again; even put a slightly larger capacity HD in, too. Then, copied all saved data back and it was ready to roll again.
On other hand you don’t have the exact problem. But, you need to and can install a new drive. I suggest a decent 1TB drive if you can determine if drive of 1TB is exactly same size as the 500G – check the specs. I have a larger HGST 1TB drive (got on sale for $60) to replace my laptop’s second data drive; currently a 500GB drive. Physical size is same so should work, soon as I get around to swapping it out! The drives in the PC are all made by Hitachi, which now is called HGST, and is now a WD company today! I recommend the HGST drive, BUT the older WD drives are likely a different size and HGST may not fit. Check specs. Get at least a WD Black series drive instead of the Blue series if price is not too much more…
Then, get to your data: You need a drive docking station (or enclosure) you can put the bare drive into and connect to a working PC via USB. You may not be able to get the data off since the drive is in its last throws of survival and it just might break completely.
As a last, and I mean last, resort, I will tell you about a friend who opened his drive that had a loose arm inside, carefully reconnected it , put it back together and got his data off. Once he did so successfully, he could just throw the drive away!
Best of luck with this.