This was a problem some years back - maybe using another machine to partition the disk at 137 and the rest then installing on to the 137Gb Partition might work.
when I was reinstalling windows vista and the program asked if this is the drive I wanted to install in, it showed a partition of 298.0 GB. So why do you think the bios is showing the primary HDD drive as being only 137GB. Either way this is the only compatible machine I have for this HDD. I have a inspiron PP07L and when I put the 320GB HDD in there it showed the same thing as primary HDD as 137GB.