"Could not unmount disk" - Trying to clean install lion.

I open the recovery drive by pressing cmd + R
Get into the disk utility to reformat the drive, I do everything as usual.
Then it tells me "Could not unmount disk"

So I tried to use a time machine save, it did not show me my system drive, only my 50gb partition. (200GB system, 50GB empty partition)

Then I went onto "install lion" and again, it only showed me my 50gb empty partition to install to.

Any ideas as to why I can't do anything to my system drive?

It sounds like the recovery partition is all you have on the drive if the system partition is not being seen. Can you post a screen shot of the drive's partitions from Disk Utility?