SMART status bad but no bad blocks seem to exist

My hard drive is WDC WD3200AAKS-00L9A0. I got it in 2007 or 2008, I don't remember precisely.

After reinstalling Windows XP in the end of 2012 I suddenly started getting this "smart status bad" error before booting my system. I'm not sure if it was caused by reinstallation, though a few things were done wrong during that:

1) Some ASUS P5K SE\EPU drivers were installed before updating OS to sevice pack 3 (Later I noticed that it said that it is needed to have at least service pack 1 to be installed before installing some drivers)

2) My system's language is not English, I think service pack for english system was somehow installed instead of service pack for my native language.

Anyway, that WDC drive was formatted recently, all data deleted but I still get this error. HDD lived like 1,5 month in this condition so far. When this hard drive had an OS everything still seemed to be working fine though, there were no system crashes or anything weird happening. The only little annoying thing was pressing F1 each time I boot my system.

So I surfed the net and read that this is a sign that HDD is dying. I backed up all important data on external usb hdd drive, got my older healthy Maxtor HDD, installed OS here, formatted WDC drive where the problem is, and that's my current setup.

I installed Victoria HDD for Windows to check my WDC HDD's condition and possibly fix it. I've been doing read-remap, read-erase commands so far, they helped to reduce a number of sectors with reading higher latency, but smart status is still bad. I guess there should be some bad sectors, or sectors with very high latency, but there are not and therefore I don't understand why is it still compaining.

Here's the log:

18:39:44 : Get S.M.A.R.T. command... OK
18:39:44 : SMART status = BAD
18:40:32 : Get passport... OK
18:40:32 : Recallibration... OK
18:40:33 : Starting Reading, LBA=0..625142447, sequential access w. REMAP, tio 1000ms
18:48:06 : Warning! Block start at 99784960 = 217 ms
18:48:27 : Warning! Block start at 102055424 = 292 ms
18:48:30 : Warning! Block start at 102417152 = 209 ms
18:48:31 : Warning! Block start at 102481664 = 256 ms
18:48:32 : Warning! Block start at 102481920 = 335 ms
18:48:32 : Warning! Block start at 102514176 = 475 ms
18:48:33 : Warning! Block start at 102541056 = 292 ms
18:48:34 : Warning! Block start at 102552576 = 380 ms
18:48:34 : Warning! Block start at 102593536 = 335 ms
18:48:54 : Warning! Block start at 104797440 = 484 ms
18:48:55 : Warning! Block start at 104852992 = 567 ms
18:48:55 : Warning! Block start at 104873216 = 559 ms
19:39:25 : ***** Scan results: Warnings - 12, errors - 0 *****
21:51:17 : Get S.M.A.R.T. command... OK

Here's a few screenshots from Victoria HDD for Windows:

Is my hard disk dying? Is there anything I can do?
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More about smart status blocks exist
  1. The normalised value (120) of the Reallocated Sector Count attribute has fallen below its Threshold (140). That's the reason for the SMART failure.

    The raw value is reporting that 638 bad sectors have been replaced with spares.

    Victoria is incorrectly indicating that this attribute is healthy, presumably because its author does not understand that a normalised value in excess of 100 can still indicate a BAD status. That's why I prefer HD Sentinel or HDDScan.

    In short, I would not trust your drive. Backup your data and replace the drive if you can.
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