Install disk for iMac won't install

I have a Mid-2011 iMac which I'm prepping for resale.  It had been upgraded to Lion.  But, I believe, no further.  I cleared the drive and wanted to reinstall the OS and apps.  Installing from the DVD got me the grey screen problem.  So, I booted into Snow Leopard (the OS it shipped with) from an external drive.  Then I tried to install the OS from the DVD which came with the machine.  I got the message: 
  mac os x snow leopard cannot be installed on this computer
How is that possible?  It was the install disk for this computer.  What can I do? 
I tried just installing Lion.  That went fine.  But, I couldn't install the apps which came with the machine.
Any suggestions?
Thanks!

The licensing issues got real murky (aka complicated) after they went to digital download only as anything obtained at the app store is not transferable and tied to the original Apple ID. So, the system throws up all sorts of ..... If Pages et al was bundled, then no, I don't think it would install as that is filed under the "non-transferable" category I believe. If you had a retail iWork/iLife disk, you should be able to install them (but must include the disks when selling). You may have the wrong disks as well: mine came with 10.6.4 (2010) and so I can't use the retail version as that is 10.6.3. I'll post a screenshot at the end of build/OS numbers.
I did a fair amount of testing on a 2010 iMac (purchased refurb in 2012) with Lion installed and the machine specific SL disks with it. I initially wiped the drive and reinstalled Snow Leopard. I updated the firmware at some point to allow recovery and, from what I've read, that is what is preventing you from being able to reinstall with the SL disk. I know I have the right disks because they worked initially, but I can no longer use them to boot from. So, I rely on bootable clones (which I prefer anyway).
From this:
http://support.apple.com/kb/HT1159#iMac

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