My macbook hard drive is failing s.m.a.r.t with no prior problems. I recently upgraded from 10.7.5 to 10.8.2 but I doubt that could be the cause.  It started with osx refusing to boot and soon it could only open recovery.

The machine is only about 8 months old and this is highly unusual no? I have windows on a bootcamp partition but should this be an issue?

This should be covered by warranty shouldn't it?