My 2.16Ghz model hangs on the Apple logo/white screen?

Hello, I have been reading all of the posted solutions that I can find related to my iMac's problem and have really gained a ton of insight into the issue as well as come a long way in the diagnoses thanks to the iFixit community.

I am asking for more help in the hopes that someone can get me the last final steps to determining what exactly is wrong so I can make an informed decision of wether or not it is worth fixing my iMac.

I am going to apologize ahead of time for the length; from previous posts I gather that details are the best means to getting the proper solution from the fantastic experts that reply to these posts.

The problem begun and continues as follows:

Some time ago my display started showing pixelation and horizontal lines as well as freezing up requiring restart. I researched and determined the possible cause to be GPU related. I ordered a refurbished (all that I could find) GPU and replaced it. This corrected the problems previously described. It was around this time that Lion released by download and I downloaded and installed Lion. The initial install failed during installation and really caused havoc trying to boot back up again. I re-downloaded Lion from another computer and created a Lion boot disk then was able to finish a successful install. This began my now current issue.

My iMac would sometimes boot successfully but other times intermittently hold on either the white screen or occasionally at the Apple logo. I concluded that the HD may be having issues and or the boot partition could have been messed up from the Lion fiasco. I opted to replace with a new HD and do a nice clean fresh install with the intent to extract needed files from the old drive later. This resulted in a nice functioning machine for a short time but then began to freeze on boot intermittently again.

Reaching the end of my ability to proceed I abandoned the machine. Fast forward to the present, I am trying to finally put this problem to bed. I left my iMac with a local iDevices/Apple shop to diagnose. After 4 days they informed me that they did not have the proper tools to diagnose and recommended I visit the Genius bar. I met with an Apple Genius today and they went through their advanced diagnostic processes right there with me. We were able to view their diagnostic software on the iMac LCD with no issues. All hardware checks showed no problems. We figured out that the iDevice people wiped the drive clean leaving no OS or diagnostic software on the HD itself. The Genius used a firewire drive to attempt boot with various versions of OSX. We were finally able to boot successfully into 10.4. Through this he concluded that I likely had a SDRAM issue since we hung on boot with all versions until we went down to 10.4 requiring less SDRAM. The genius recommended I start with a new install of 10.4 and then later work my way up and swap SDRAM sticks around to determine which one may be bad and/or if a socket was bad, etc.

After several attempts to load install from the original system CD; I just get a hang on the Apple logo then the screen darks out and shows the dark grey square telling me I need to restart. I tried my original retail copy of Leopard with no luck either, Leopard holds on a blank blue screen. I began consulting the iFixit solutions and this is where I began gaining new insight and fixes to attempt (thanks a ton "oldturkey03" & "mayer" your help is phenomenal). I have the front panel off, verified all four diagnostic LED's are on, system goes through post, I get beep, white LED turns off. I have reset the NVRAM successfully and received two confirmation beeps. If I have my system disc in, I get hang on Apple logo/restart message. If I have system disc out, I get question mark file logo. I was able to use the "D" command on startup to run diagnostics. Both the quick and the thorough versions reported no issues. GPU shows correct memory, SDRAM shows correct amount.

I then disconnected the SATA cable from the logic board since it is right there up front and attempted boot with and without system disc. This test yields same results as before. I now suspect that my HD and/or my SATA cable could be the problem. Also as a further note; I have connected another display and when I move my mouse cursor around in the diagnostic mode, it moves from screen to screen as expected. I do however get a fixed cursor in the upper left corner of the main LCD even with the functioning mouse cursor during diagnostic. This is where I am at now...

Once again I apologize for the lengthy post but hopefully this will help many others out there with the same problem but are unable to progress diagnostics as far as I have. And I greatly appreciate any help the community can offer. If my problem resolves, perhaps I can summarize the solution into a neat little fix and contribute in return to the community.