Sounds to me like you've got a HDD in the very early stages of failure, though the fact it won't boot off a FW drive is a bit curious. Still, it's possible that while accessing the FW drive, the 10.6 install corrupted it.
So, I'd agree that it's time to take it somewhere to get it looked at. AHT is just this side of useless, especially for HDD related issues. All it does is check to see if there's a SMART failure. Out of the maybe 3-4 dozen HDDs I've replaced in my time, I can probably still count on one hand the number that have had a SMART failure that would be picked up by AHT.
Take the thing somewhere where they have the big boy toys for diagnosing units. Any AASP or Apple retail store will work. If it's under warranty, it won't matter which place you take it to, Apple will be picking up the tab.
Anyone who really KNOWS Apple OS-X will nail this - it's classic and uncomplicated.
>> new iMac 21.5, 10.6.7 94 days old.
I get the grey screen, the spinning gear, and eventually the circle/bar.I did all the things other forums suggest: PRAM, safe boot, checked the disk and permissions in Disk Utility, AHT says OK. Will not even start off FW drive in Lion.
I was trying to reset permissions one day and it started giving me error messages. Hundreds of them.
If I reload 10.6.7 it runs fine. restarts fine. Power off = no power on. Please!!

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