I'm seeing the "No" sign on Startup, and my internal drive doesn't show up.

Good day to you all. It's my first post here and I come to you in desperation.
Last night, i was browsing the internet and syncing my iPhone. Suddenly my iMac froze and there's no way to restart it but to press the back button. Upon restarting, it showed me the Apple logo then a few minutes more it showed me a "No" sign (ie. No Parking circle.) Noticing that this is a serious one, I pulled out my Snow Leopard installation disc and restarted the system. Last night, I managed to see the internal disk listed in Disk Utility, but it's in red. The partitions (Mac OS X and Windows XP via Boot Camp) can be seen but cannot be accessed. Desperate and tired, I slept the night off.
This morning, I tried my luck again. Fired up the iMac with SL inserted, opened up DU, and my internal drive is not in red anymore. I managed to open my Mac but I really noticed the sluggish performance. A couple of hangs later, I had to restart again using the button at the back, and there it was again: No sign. But now it's even worse. I can no longer see my internal drive in DU. Tried almost everything: resetting the PRAM (holding the X button) and pressing the C with SL disc inserted just doesn't cut it. The odd thing though, is when I press the Option key upon startup, I can see all the partitions (Mac OS X, Windows XP, Snow Leopard disc.) But upon clicking Mac OS X always ended up with the "No" sign.
I'm really desperate since I although I'm using Time Machine, I know I exempted some folders in there. Can you suggest some more instructions to make my internal drive show up? Is there a Terminal command of such kind for it? I hope my drive is still okay since I can still see all of the partitions via Option.
Any help is appreciated. Thank you so much in advance!

kaloyster,
Welcome to Apple Discussions.
From what you are describing it looks like your HD has either fully failed or is failing. I would suggest taking it in for service. The good news is you have been using Time Machine so you have a backup of most of your system. As you may know TM does not backup any MS Windows data.
If your machine is still covered by warranty or AppleCare this should be pretty painless. If you are not covered by either then just contact an Apple Authorized Service Provider and bring it in. The contact information in your country is:
Philippines 1-800-1441-0234 www.apple.com/asia/support/
Regards,
Roger

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