I had a very similar problem recently with my trusty Mac Powerbook G4. After trying many different methods to re-establish internet connection, I set it aside for several days. Unplugged, the (original) battery ran down to zero. I assume one could achieve the same result by removing the battery for a short period. Good news is, that when I plugged it in to recharge the battery, it began working normally.
I don't know if something like this will work with an iMac, but it's certainly worth a try...
Yesterday evenining I was suddenly unable to connect to the internet anymore using my wireless connection on my iMac. It says it's connected to the wireless network and it's sends through a correct IP-address but when I try to visit a webpage using Google Chrome or any other browser it says the DNS-lookup has failed, every other application that requires a working internet connection on my iMac also can't connect to the internet.
My iPod Touch can connect to the internet using my wireless connection just fine. I just hooked my iMac up to the network using an ethernet cable and now it seems I'm able to make a connection without a problem, however this is not a permanent solution. I'm using Mac OS X version 10.6.8 any ideas?
Thanks in advance.