If you find it then see if you can drag/copy it to your desktop. This will show if your computer can read the file or not. If you get an error copying it then it may be a case of a scratch on the CD that corrupted that file. If you can copy it then when the computer asks for that file during installation you can browse to the one you copied on your desktop to get past that part of the installation. Then you will have to point it back to your CD to finish installing Word.
Another option is to see if you can make a copy of the CD successfully and then try to install Word from the copy.