Deleted Macintosh HD, created untouchable partition and now blinking stop sign. Help a gorilla out.

[bombem]

So a friend was looking into selling her Macbook Air mid 2013 to someone and came to me for help in transferring pictures from it onto an external hard drive she had bought. She was having some issues doing it herself since the drive wasn't showing up when she plugged it in, easy, so I went to work on it.
I formatted the external hard drive (to MacOs Extended Journaled) in order to get it to show up on the computer and everything was fine thus far.

Now to the resetting of the computer where things took a turn for the worse. While restarting I held down cmd+R and after that chose Disk Utility. I erased Macintosh HD, as I usually do when factory resetting a mac and everything looked absolutely fine. After this, I went back into the options menu to reinstall the OS and the computer went straight into Internet Recovery. The progress bar was loading as it should and the OS X Mountain Lion "install manager" shows up and asks me what drive I would like to install the OS. Problem is, Macintosh HD is gone and that whole area is empty.

If I try to reboot the computer as if nothing happened I'm met with a flashing stop sign. So I reboot while holding cmd+R again.
Going back into the Disk Utility I see an unmounted drive and under its properties or info I see that it's a partition. Everything is greyed out so I can't touch anything there and it is about the size of what Macintosh HD should be, ~121GB.

I'm suspecting something went wrong during the formatting of the external hard drive since it took a few times of erasing until I could get it to show up, but I'm so lost.
My question is how do I fix this, how do I get Macintosh HD to show back up in Disk Utility. And what is that partition doing there and how can I get rid of it?

If this has been answered somewhere else in this forum please point me in the right direction!

 

[Fishrrman]

Well, if you erased the internal drive with her pictures still on it -- you ain't getting them back (in all likelihood).

What you need to do now.

1. MB must be powered down, all the way off
2. Press the power on button
3. IMMEDIATELY hold down "command-option-R" and KEEP HOLDING THEM DOWN until the internet symbol appears
4. You will need a wifi password to connect
5. Give it a while to load the OS utilities via the internet
6. Do you get to the OS utilities screen by doing this?

If so, come back, and we'll tell you what to do next.

 

[bombem]

Well, if you erased the internal drive with her pictures still on it -- you ain't getting them back (in all likelihood).

What you need to do now.

1. MB must be powered down, all the way off
2. Press the power on button
3. IMMEDIATELY hold down "command-option-R" and KEEP HOLDING THEM DOWN until the internet symbol appears
4. You will need a wifi password to connect
5. Give it a while to load the OS utilities via the internet
6. Do you get to the OS utilities screen by doing this?

If so, come back, and we'll tell you what to do next.

Luckily, we transferred everything of value onto the external drive before we got to screwing everything up. Will try your solution and get back! Thanks!

 

[bombem]

Well, if you erased the internal drive with her pictures still on it -- you ain't getting them back (in all likelihood).

What you need to do now.

1. MB must be powered down, all the way off
2. Press the power on button
3. IMMEDIATELY hold down "command-option-R" and KEEP HOLDING THEM DOWN until the internet symbol appears
4. You will need a wifi password to connect
5. Give it a while to load the OS utilities via the internet
6. Do you get to the OS utilities screen by doing this?

If so, come back, and we'll tell you what to do next.

Worked like a charm!