Magnetic recording disk drive with method for recovery of data from failed data sectors

A magnetic recording disk drive determines the locations of defective bits in a failed data sector, and allows for the error correction code (ECC) to correctly decode the data from the sector. After a sector has failed decoding, the digitized waveform and the read channel state from the failed sector are stored in memory. A nondata pattern is written to the failed sector and read back to determine the locations of the defective data bits in the failed sector, which are then used to update the read channel state. The data pattern from the failed sector, with the identified bit error locations, is attempted to be decoded. If the decoding is successful then the sector is marked as bad and the correctly decoded data pattern is written to a different region of the disk, for example physical sectors specifically intended for use as spare sectors.