Help! I'm stuck in safe mode

Ever since I installed Snow Leopard I keep having sporadic screen freezes that happened about once every 2-3 weeks.
Today, my Mac stopped booting and I keep getting a white screen with some bigger chunks of black pixels spread out on the screen. This happens after I saw the grey screen with Apple logo.
It looks like there something wrong with the graphics card.
Here's what I tried so far:

• boot holding command + S, then do a fsck -y
• boot in safe mode and run all disk permission checks/repairs + volume check
• unplug all cords except keyboard and press power button for 10 seconds
• boot holding option key trying to boot from a MacOS DVD (both Snow Leopard and previous version that came with Mac) => was able to select DVD, but then Mac froze with light blue screen

Looks like I'm stuck in Safe Mode, because that the only way my Mac would boot.
And of course this Linux mode (?) while pressing command + s.

I have a Time Machine backup of the whole system, so I was going to format my Mac.
However, safe mode doesn't let me erase it with Disk Utility and I can't start from a MacOS DVD.

Any ideas what else I could try to erase my hard drive and reinstall MacOS or fix that problem another way?

Thanks for any tips or hints.

Daniel

P.S. It's an iMac (early 2008) 20", running Snow Leopard.

It looks like you have several problems ongoing. First, see if you can clean your optical drive on the iMac. Buy a can of compressed air and blow several short blasts into the drive. Then try again to boot the machine either with the original Leopard DVD or the Snow Leopard DVD. If you can get it to boot from the DVD, do a verify and repair on the hard drive. Let's see what it says.

Thanks for your response, chscag.

The DVD drive seems to be fine. It recognizes the DVD in safe mode and I can even start reinstalling MacOS. However at some point it always ends in a blue screen.

In the meantime I tried a couple more things:
- hook up my old Powerbook through fire wire target mode to use as an external optical drive. Then tried to reinstall MacOS => failed with same blue screen, even though the drive was recognized properly.
- I'm currently trying to format my iMac through target mode, which seems to work. Takes another 5 hours before I can post a result. Tried to format through safe mode before, but that's not possible in safe mode.

It does sound like the hard drive may be failing. Let us know what happens with the Target Mode format attempt.

The formatting via target mode worked out, but now I can't seem to reinstall MacOS.
Starting up holding the option key works and I get to pick the DVD symbol, but then I get the blue screen again and nothing happens anymore.
Also tried to install through target mode, but my old Mac can't install Leopard or Snow Leopard.

What else can I try to get any MacOS back on my Mac?
Safe mode doesn't work anymore, since the hard drive is zeroed out.

I finally got it resolved, but I needed the help of the Apple Store for it.
The video card (graphics card) had to be replaced. Now everything works great again.
It cost me 170 bucks ($131 part + $39 labor).
After the initial diagnosis by the Apple Store (which is free) they suspected either the video card or logic board to be the broken part, so I decided to have the video card be switched out first to see if that helps. It did.

The logic board would have been another $476. No additional cost for labor, because that would have been all covered with the $39.

I also learned something that day: Apple products are considered "Vintage" after 5 years, that means that the Store won't be able to repair these items onsite anymore. Of course Apple can still fix it, but it'll have to be mailed in by the store, which just takes longer.

Thought you guys might be interested in that.

Have a great remainder of the week!