In the installer, have you gone through the Disk utility and set the HDD up as GUID? If you are using an OEM Lion build, it will not allow installs to an MBR partitioned hard drive unless you edit some files prior to installation.
Also, Im not sure about the bios of your E6420, but you also need to go into the Bios and set the hard drive to AHCI mode.
Hope that helps!