Can't do factory restore & only disks that keep ejecting are the osx install and apps disks

Question

First of all let me say, this is my first Apple computer and I'm not experienced in forums. Please do not read rudeness into what is actually frustration at searching forever for a solution and trying not to wish I had been talked into an Apple.  With that said....
I've had my iMac for about a year and a half.  We had lost our internet and were using a hotspot for awhile so we could look for another provider and get online if we needed to.  One day I signed on and, we didn't have an isp mind you, but the browser opened up to the dominant isp in this area saying a virus was detected coming from this iMac address? I thought that was strange and panicked so decided to do what I would on a pc, just restore the whole thing to factory settings.  Everything was going smooth, (my updates were at 10.6.8 at the time)... when I restored I was back at 10.6.2. (osx disk) I was doing systems updates and one apparently hung.... when told to restart, I did... but the computer would never boot back up.  It would turn on.... go to gray screen... then blue screen... then shut off.  I couldn't boot in safe mode, pram reset did nothing, smc reset did nothing, couldn't hold 'd' to get to diagnostics, couldn't boot to recovery... it kept spitting out disks after trying to read them... with all those solutions I found online and nothing helping I had to call Apple... they couldn't help over the phone because Apple Care expired, unless I purchased help... this frustrated me because every where I found my problem and a different solution their Apple Care had expired too.... so had to set an appt at an Apple store.
So took it in to Apple, just got it back yesterday.  I let them know I was restoring to factory settings so wasn't worried about losing anything.  When I picked it up, I was told no charge... it was a software issue they saw where it hung and fixed it.  I tried to ask questions about the 'software repair' but they didn't seem to want to answer my questions.  It just says 'software repair' on my order. So I asked 'okay, so it's back to factory settings like when I bought it?' I was told yes and I said great that was my goal anyway.  I get home and it's NOT like when I first purchased it or like a factory restore.  Everything I was doing before it crashed is on there. So I'm back to trying to do a factory restore.  But for some reason now, it seems the only disks that keep self ejecting are the osx install and application disks. I still can't do a boot recovery, AHT, or 'c' boot... since the apple disks eject I can't use start up to get to them. 
I find it odd that both the oxc install disk and applications disk would be damaged at the same time when they both previously worked.  I called the Apple Store where I took it to talk to the geniuses that worked on it because I had a question about the repair they did....
Apple: I'm sorry we don't offer tech support
Me: I understand but I had a question about the repair done from there the other day
Apple: We are just a store and can't answer tech questions
Me: I understand and get that but since I took my mac to your store to be worked on I thought I could ask the person that worked on it a question about the 'software repair' and meaning and what software was repaired
Apple: No you will have to set another apt to bring your computer in if you are still having problems
Me: UGHHHHHH (pulling hair out)
So (a little late huh?) to make a long story short giving what I stated above:
Why is it, only the osx install and application disks not working now? They worked before taking it to Apple
What can I do at this point?
Can you do a factory restore without disks on a Mac?
If by chance both disk did for some reason go out, how do I get them replaced?
If I gave TMI without enough important info let me know.
My OS X install disk says version 10.6.2 on it
About this Mac currently says Mac OS X version 10.6.8
Batteries died on keyboard and mouse so am using usb wired keyboard and mouse
At some point I had used bootcamp and then later found parallels so I could install a Corel product and keep using... could some windows files be messing something up in there somewhere?
It used to say Mac OS X Version 10.6.8 and I could have sworn I saw it said 'snow leopard' in there somewhere, now I can't even find that word in search on the computer. Long post I know but trying to set what was going on at the time I took it in.
I'm not sure what else needs to be added to get this to the correct thread or help.  As I stated my goal is to have it like I just pulled it out of the box for the first time so no solution will scare me off about loss of data. 
Thanks for any help.

Answer 1

Wow, sorry to hear of your experience. Seems strange that your disk would just eject like they did. It could be a lot of things but more than likely you just kind of have to start all over.
What I would do is insert your system disk and instead of going immediately to an install I would go to disk utility and erase the drive. That will erase everything on the disk and give you a new blank disk to start with. After that I would try to reinstall the system. Assuming that goes well then you should be restored to where it was when you purchased it. After that you can reinstall all your applications or personal files. I hope you have good backups.
I remember one time I was having a similar problem and don't ask my why I did it but I actually could not get it to install a system. I removed both of my ram sticks, shut the computer down for about 10 minutes including unplugging it from the wall plug, then reinstalled the ram, plugged it back in and started up from the system disk and all worked just fine. To this day I have no idea if pulling the ram helped but I have never had to do it since and for some dumb reason that solved the problem I was having, which is the same problem you are having now. Call it voodoo but it worked.
Good Luck!!
Message was edited by: Al Van Malsen