2007 iMac won't boot from startup disc

My brother passed away and I inherited his Mid 2007 iMac. Works fine, but all accounts are still in his name and I do not have his passwords. Trying to wipe the hard drive and do a clean start, but unable to boot from startup disc. It was purchased with Snow Leopard, but has been updated to Lion 10.8.3. It appears that there may be a security feature that rejects any attempt to boot from startup disc. Is there another way to wipe hard drive and start clean?

Sorry for your loss ...
The original startup disc will not work on a Mac running v10.8.3.
The fact that you do not have the admin password is a problem because you will need it to repair the startup or restore OS X using OS X Recovery

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    Migration Assistant Update for Mac OS X Snow Leopard
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    Message was edited by: Grant Bennet-Alder

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