Download and install the trial copy of PerfectDisk Home edition:
http://www.perfectdisk.com/
There is a tab named 'System Files' click on it.
Click 'No' to the first pop up message and click 'Yes' to the 'Boot Time' defrag option.
Reboot your PC and watch the boot time defrag do it's thing.
After Windows has loaded run MyDrefrag and choose the 'Analyze only' script.
Have the 'Red' areas near the top of the display moved down towards the bottom of the display.
If they have and there are no other files (color bands) near the top the you can exit MyDefrag and see how much more you can shrink the C: partition. My guess is we need to shrink about another 15% or about 20 to 25GB to get those bad blocks over to the unallocated
space.
Report back as even if the "Red" didn't move there still ways to eliminate some if not all of the red band near the top.
JS
http://www.pagestart.com
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