As you just did an update Vs a full version upgrade I'm very surprised your system is having problems. The only two things I can think of that could have messed you up is a firmware update that was also needed (the update was trying to install it). Did you get a message to wait while it updated the firmware? The second it your HD was in trouble ant it was just the act of updating that pushed it over (that has happened to me a few times on older systems).
I would recommend making a backup before doing OS updates or upgrades in this case its a little late.
At this point I would hold off taking the drive out. Instead start it up and let it run for about a 1/2 hour without touching it giving it time to update the firmware if you interrupted it it will try again.
If you did pull the HD you'll need to use an external bottle HD with the firmware update. Here's the Apple TN on getting the correct firmware EFI & SMC firmware updates for Intel-based Macs.
If the firmware didn't need updating > Do the above first <
- Option 1 - Use an external drive to boot up your system and then try running Apples Disk Utility App to repair the permissions and then try repairing the HD. Did that fix it?
- Option 2 - If you have a second Mac and can connect the two together via a FireWire or Ethernet cable back to back. Then restart your system in Disk Mode. Can you access your systems HD from the other system? If you can run Apples Disk Utility App to repair the permissions and then try repairing the HD. Did that fix it?
If you can't see the HD or you can't startup the OS off a second drive the drive is likely damaged to the point it can't be fixed. Time for a new HD. If you do decide on replacing the HD you do need to be careful with the SATA I/O speed. As we don't know the exact model you have we'll need to wait until you tell us so we can tell you what to watch out for here.