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I did have problem like you are, but then I bought second SSD, so I can remove old-crap-HDD forever.
My steam install is currently on it's own dedicated drive. If the disk copy keeps wanting to install to C, then you could just add the game key to the library and download it through the client.
I use a 128GB SSD as my primary drive with a 3TB as me secondary. Steam and all my games are installed on the secondary drive. I still get fast load times after the initial loading of a game.
Delete everything in the Steam directory except Steam.exe and everything in the Steamapps folder. Run the Steam.exe and set the install directory to the second drive, move the Steamapps folder over. Re-verify the games and good to go!
If you want, you can have 2 instances of Steam installed. One on the Primary and the other on the secondary. Just need to close one then open the other.
My steam install directory is close to like 1TB. :P