You should always have a LiveCD or LiveUSB stick (preferably Ubuntu) with you when using a computer encase something like this arises.
You can use Ubuntu's Disk Utility application to see if your Drive is going out for not.
I recommend backing up your data ASAP. Either to an external hard drive, or upload it in the cloud on your website (if you have one), DropBox or OneDrive (formerly called SkyDrive). There are others but these are my quick suggestions.
As for defrag I would not recommend it at this point because if your hd is failing it may cause corruption and you don't want it to do anymore work it needs to do.
Get a new hard drive and/or find out if it's failing first before attempting to do anything else with that computer. (I'd also recommend getting a second computer encase something like this happens again)