Serious repetitive IMAC problem HELP

I have a 2008 IMAC that was a great machine until November of 2011 when it started to slow down and I got my first glimpse of the beach ball. things progressively got worse and by the end of December it would no longer boot. I took it in and the store told me that they had to wipe the Hard drive and start fresh. After doing so they said it tested fine. I took it home and re installed some of my software, Microsoft Office and Adobe creative suite 4, but the computer couldn't handle it and it would no longer boot again. I have repeated the process 3 times with the store geniuses and they keep telling me that once they re format the drive and re install the OS that everything tests out fine. I am not using time machine or restoring any significant amour of data just a few word documents and PDF files that I need to be able to email. I never even got to do a simple task with Adobe. In fact this time I didn't even load it again. I was running regular Leopard and so after the third failure I finally installed Snow Leopard on a new install fresh. It lasted a whole 2 days and now I can only boot via the disk utility again. Checking verbose mode told me that the same problems as usual were occurring again. What in the world is going on that the HD keeps becoming trashed?

It sounds like your hard drive is failing. I'm rather surprised the genius bar at the Apple store didn't test the drive for you. Do you have your original install DVD? Leopard? Snow Leopard? Boot the machine with it and run Disk Utility from the DVD. Do a verify and repair on the hard drive. Let's see what it says.

They have tested the drive that is the funny thing. I have had it in the the store for repair 3 times in the last 4 weeks for the same problem. Each time they have to re-install they do test the hard drive and say it tests ok. They are as confused as I am.

I ran the utility and it was unable to repair. I have now erased the drive and am starting up fresh again. The drive sounds like it is running real slow but I am not sure. I am reformatting with the original leopard 2 disk set and will then run the upgrade to snow leopard. I wish I could determine the root cause for this nagging problem. This IMAC is a 2008 model but I purchased it late so it is only a little more than 3 1/2 years old. I expect much better from a Mac then that!

Intallation of OS has now failed in the final 3 minutes of it's process. "An error occurred while installing Mac OS X. Click Continue for details."

I did and all I got was the beach ball. After it stopped spinning it was just locked up on the error message and never gave me the details. Go figure.

Again, it sounds like the hard drive is failing. If Disk Utility is unable to repair the drive, that tells us the drive is likely defective and needs to be changed out. It's a work of futility to keep reformatting and trying to install OS X on a drive that's not functioning. Take it on back to the Apple store and tell them to change out the drive or do it yourself. The instructions for changing out a hard drive in an iMac can be found at iFixit: The free repair manual. A warning here.... in order to access the hard drive, the entire front panel display must be removed which requires care and some special tools.

I think you should also run Apple Hardware Test:
Apple - Support - 503

(It's not unusual for motherboard or RAM failures to cause accumulated hard drive write errors - same end result symptoms)

I'm completely confused as to why the Geniuses wouldn't just swap out the drive after the first re-occurance. Hard drives are (still) cheap as chips and you (and they) would have a quick answer as to whether it was something else or not (my guess, it's not something else).

Dropped it off with the Apple Store this afternoon. Just about $230 for a new hard driive. They finally agreed that it should be the next step instead of just erasing and re-installing.

OK, that's good to hear. Let us know how it turns out.