Hardware test Error

I have a Imac7/1 2.4 i started giving me alot of pinwheels and completely freezing forcing me to restart. after three weeks of sitting it seemed to be working again. i upgraded to os x 10.5 but the problem occured again after starting up the comp. i did multiple hardware test (long and short) finally i got this;
4mo2/1/40000003: hdd

at this point im 90% sure its the HD but dont wanna crack open my box and not be the fix. any thoughts would be appreciated. i have also done many disc repairs that come back clean when the HD is working. if i have the reboot CD in its the only thing it will read. and i sometimes get a folder w/ ? at start up
Please help
PS: sry for the format first timer.

Well, the symptoms sure do sound like a bad hard drive, and the hardware test seems to confirm the diagnosis.

Thinking about the situation critically, there are very few moving parts inside of an iMac. There's even less moving components that are extremely complex and have a high failure rate. When you factor out the least likely to fail components, you're left with one fairly solid culprit - the hard drive.

Fortunately, it's inexpensive to replace. Unfortunately, on the iMac, it's fairly difficult to get to.