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I'm no Toshiba expert but I have seen many a PC in my time say 'no operating system' because its attempting to boot from the HDD and there is no partition (or OS for that matter) present. When you run the normal Windows install, I believe the second screen after welcome prompts you to create a partition and install the OS. I don't think this is happening with however you are using the discs and this is why the PC boots and prompts no OS. I'm sure your following in instructions, so Google this model and see if others are having a similar problem with their backup discs, there may be some sort of special workaround available.
While you have it in safe mode, make sure you back up all your personal data to a cd as is sounds like it is not going to last much longer. After you back up all your information....Documents, Pictures, Music...etc... Then I would reformat the machine with the original installation disc that came with the computer. That should fix the problem. Never even heard of a boot processor :)
Try disconnecting power adapter and removing battery for two minutes. If the laptop still does not boot then there is an hardware problem. You can try taking out and putting back ram modules, but my suggestion is to take the laptop at a repair shop, if you cannot fix it by removing battery.