After further testing I have determined the culprit of MacBook’s grey screen of infinite loading is caused by its hard drive failure. So I took the hard drive out and tested it.
This is the result:
I went to Hitachi’s website for support and it appears to be down. Good work Hitachi, looks like you have so many hard drive failures that your support website has to be taken down.
The resolution would be to buy a 320GB for my MacBook, no way around it.