Long story short, I got another disk and promptly began the recovery process. I booted off an old recovery distro I had on my USB stick (Ubuntu Rescue Remix 8.04).
Last weekend my new 701SD arrived in the mail. So far I am loving it. I installed KDE4 + debian squeeze on it and its amazing. For fonts I reduced everything to 7pts, and made my menu bar (panel) autohide. So far I have no issues with the 800×480 resolution on the 701. I do have some pet peeves with Asus though. It seems that they deal with the worst keyboard manufacturer of all times, most of the EEE’s except for maybe the 1000HE have the worst keyboards around today. They are a cross between buckle spring keyboards, and really cheap silicon.