20" imac won't start up-flashes between blank grey screen and black screen

20" imac
2GHz Intel Core 2 Duo
Was running system 10.5.8 just fine. Worked great.
But then I wanted to give the imac to a relative. And so, I tried to boot from the original grey mac install dvd to wipe the hardrive and set the imac back to factory specs.
But it wouldn't boot off the dvd. All It would do at restart was to flash slowly back and forth between blank grey screen and black screen. So, I tried the Leopard update dvd. Same results. So I zapped the pram and tried again. Same results.
If I just pushed the start button tho.. the imac would start right up and run fine. However, I didn't want to give it to someone else with all our information on it.
I finally restarted it and held the "T" key to turn it into a giant firewire drive, hooked it up to our other 20" imac, and used the disk utility from the second imac to erase the drive of the first imac. Then I inserted the grey install dvd into the second imac and selected the drive of the first imac and ran the install process.
Now, the first imac won't start up at all. Just a continual grey screen for a bit, than a couple of buzz sounds in the machine and then the black screen... than back again.
It ran great before I erased the drive and re-installed OS 10.5
What's wrong? How do I get the machine to either boot off the install cd?

So, I've figured out a little more on the first machine. It's a 20" 2.6 GHz Intel Core 2 Duo running 10.5.8.
It ran great. But, I wanted to erase the hard drive and reinstall the OS system before giving it to a relative.
I found that although the optical drive would read and write to normal cds and dvds, the machine would NOT boot from the grey start-up disks I had on hand. ( I have two imacs, and I tried both sets of dvds without success.)
I zapped the PRAM, and used disk utilities via firewire connection from my other 20" imac to check the hardrive and make repairs. Disk Utilities couldn't find any problems. So, using disk utilities from the other imac, I erased the first imac's harddrive and then used the install dvds on the second imac to install the original OS to the hard drive of the first imac.
(looking on the hard drive of the first imac, I can see all the contents)
However, the first machine will not start up. It just switches from grey....to black..... then grey..... and then black again.... over and over
Why won't it boot from the newly installed OS on it's own hard drive?
And Why won't it boot from the original install dvds?
How can I get it to start up again?

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20" imac won't start up-flashes between blank grey screen and black screen

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