Hard Disk Monitoring

Drive had no previous known problems - except "There are 8 bad sectors on the disk surface"
Power on 383 days - installed 4 March 2013

Today I got these warnings:

Critical value degradation [9 %]

15/07/2014 2:36:10 PM,#198 Off-Line Uncorrectable Sector Count 65528 -> 0
15/07/2014 2:36:10 PM,#197 Current Pending Sector Count 65528 -> 0
15/07/2014 2:30:59 PM,#198 Off-Line Uncorrectable Sector Count 0 -> 65528
15/07/2014 2:30:59 PM,#197 Current Pending Sector Count 0 -> 65528

24/06/2014 7:40:01 PM,#5 Reallocated Sectors Count 0 -> 8

I did get a BSOD last night [Windows XP] - which is rare - but I suspect is not connected

Should I panic/worry and replace the drive ASAP? Why do the counts flip up and down like that?

Not sure about the BSOD, would be nice to know its details.

It may be the result of the problem - but the opposite is possible: the hard disk had weak sectors due to the BSOD (or more precisely the unfinished write operation, caused by the power loss). This is more common: due to the power loss (by the reset / forced shut down) the hard disk may not be able to finish the write and then it may record some special values in the error-counters (the 65528 indicates that, it seems an underflow condition).

Usually, if sector(s) marked as weak by the hard disk, further use of the hard disk may confirm if these sectors are actually good and can be used without problems. If this happens, the error counters automatically reset and the health of the drive automatically increases.
You're lucky if this happened immediately - usually further tests by special methods required (see http://www.hdsentinel.com/hard_disk_cas ... ectors.php for more details) to force the hard disk to do this: to investigate the sector status and restore to normal - or prevent further use of the sector and use the spare area instead.

Personally in this case (generally, when there is a health decrease / change in the status in any ways) I'd perform a backup just to be sure and perform testing, as described at http://www.hdsentinel.com/faq.php#tests
just to confirm if the hard disk status is now stable and all issues are already fixed.

The
1) Disk -> Short self test
2) Disk -> Extended self test
3) Disk -> Surface test -> Read test
tests can be used any time (even if the drive contains data) - so if these would report no problems, the drive can be used.