I am seeing this on some of my customers' VPS servers as well.
I tested it on a new installation of cPanel on a CentOS 5.5 VPS running on a KVM host.
There is no hdc device in the guest's configuration, but when I go into WHM and click Format/Mount a new Hard Drive under Disk Drives, it shows that it found a drive hdc.
If the user clicks the button to Partition, Format, and Mount that drive, WHM will place an entry in /etc/fstab and the system will not boot from then on until the entry is removed.
Is there a way to fix WHM so it does not show this fictitious drive?