I think I've got it figured out. When you established the primary partition for Mint and labeled it dev/sda3 instead of dev/sda2, the partitioner set up the extended partition dev/sda1 with dev/sda5 inside it. When you tell Grub to boot (hd0,0), it goes to dev/sda1 and finds no bootable entry. Hopefully the Windows bootloader went into dev/sda5 along with Windows. In this case, redirecting Grub to (hd0,4) will boot Windows.
The bad possibility is that when the extended partition was set up, the Windows bootloader was destroyed. If this happened, you can try entering Windows recovery mode and running "fixmbr". This hopefully would repair the Windows bootloader. But first try the (hd0,4) fix. If that works all else is academic.
While I was writing this you posted your response to my last post so most of this is obsolete. It sounds like the Windows mbr was destroyed when the extended partition was created. If you are running Vista, you can recreate the mbr using Easy BCD http://www.pcworld.com/downloads/file/fid,64565/description.html?&page=9
. If you are running XP, it may not be so easy.
Sorry, but I really don't know enough about Windows repair to help any further.