I think that if you were to say this to anyone, they would 99% of the time say straight away that the problem is with the hard drive (as you have also said).
Most Apple products I have dealt with are built quite snug and cramped, the hard drive is screwed down and really does not have much room to move around so I doubt that it has just come out.
As Josh K has said, the first thing should be to take it to Apple as they may honour the warranty on it and provide a free fix. If you were to open it up yourself, you may lose any future warranty on unrelated issues.
However, if Apple do not honour the warranty or want to charge a repair fee (usually quite extortionate) then as long as you know what you are doing, buy yourself a new laptop drive, any speed (5400/7200RPM) and any size of matching interface (most likely any 2.5" Sata drive will work).
Then just load OSX on as a fresh install and you should be as good as new.
As for recovering data, you may be out of luck. If it is very important, go to a specialist. If however you want to try yourself, once you have it out, plug it in to any working computer and I would personally use R-Studio (not free). There are other tools out there, but I haven't tested them with hard drives used in Apple machines.