The iRiver original firmware cannot connect with a CF card, period. That's why you are getting that Check HDD message from iRiver and are unable to flash the OF from the CF card.
So the work-around is to patch the OF with the 7pre4, but do it FROM A HARD DRIVE (i.e., the same 1.8" Toshiba style as the original hard drive), not from a CF card. Once it is patched, then replace the hard drive with the CF card assembly. The iRiver will boot into the Roxbox you installed on the CF card.
To recap, you need to do this upgrade as a two-step process: 1) patch the iRiver firmware by putting the modified .hex file on the hard drive of the device. Since your drive died, you'll need to get a replacement from eBay or some such place. It doesn't have to be the biggest and best, it just needs to work; I would get a 20 GB MK2004GAL (same as your original), which only cost $12-$16 on eBay. Then follow the iRiver procedure for flashing the firmware. 2) Replace the hard drive with the CF card and its adaptor, with Roxbox pre-installed on the card (I like to do that using the card reader in my computer). Next time you boot up, the iRiver will automatically go into Rockbox.
If you feel like booting up into the original iRiver firmware instead of Rockbox, you will get the same error message and see the same screen displaying a lack of files. It will be for the same reason: the OF is unable to read CF cards. This doesn't bother me, because I prefer Rockbox. It is a trade-off, but one I am happy to make.
This method should work for you. Good luck!
--Pete