iMac 20" A1174 boot issue

This iMac A1174 is the newest mac I have ever owned, and I don't know much about mac. I have always been a PC type of guy. I picked this machine up from a recycling center for cheap (go ahead and roll your eyes), but I wanted a project.

Here's the deal. It powers up ok, and I hear the chime then it goes to the grey screen with the apple. I can hear it read from the HDD for a couple of minutes and can see the wheel spinning under the apple, but it doesn't load. The wheel just keeps spinning. If I boot from an OS X boot DVD it will do the same thing, or just shut off.

I have tried replacing the HDD, and got the same results. I have tried resetting the pram, no change.

Does anyone know if this is a hardware or software issue? Which direction should I look next. Any advice would be handy.

It has an Intel Core 2 Duo, 250G HDD. 1G DDR2. Super combo optical drive.

Thanks.

If you bought it from a recycling center you can probably imagine why it was there in the first place.... It sounds like a hardware problem, possibly a bad logic board which would mean it could be an expensive repair. If it is, it's probably not worth messing with. Try this first before you give up:

Remove the hard drive from the machine. Now try booting with the DVD to see if it will boot. If it still doesn't boot, it's probably a serious hardware problem. (see above)

I would not have thought of that, and will try. Thanks.

No go.

You gave it a good try. Keep the machine around for parts in case you pick up another just like it. Or you can always sell it for parts as it still has some value. You never know what you'll run across in the future.