IMac stuck on gray screen

I have an early '08 intel-based iMac which has quite suddenly not been able to restart.
I do have it partitioned to run Windows XP and I thought it was a problem restarting after working on the Windows side, but even if I leave it on the Mac side for an night, I still have the problem
I have taken it to an authorized Apple dealer and it has been checked out. No hardware issues were apparent.
I do have a Seagate external hard drive attached via USB for Time Machine and I also have a 7 port USB hub also attached via USB. The only other USB port in the rear of the computer has the keyboard attached.
I am able to startup from the Snow Leopard OS CD and if I hold down the option key at startup, I am able to startup Windows or my Time Machine backup or the CD, if I have it inserted.
However, I am not able to startup with the Mac OS on the internal hard drive which is running 10.6.8 and all the updates have been installed.
As I said, the Apple techie erased the hard drive and reinstalled both the Mac and Windows partitions, and although it seems to restart if restart is attempted soon after, the iMac restarts, but if the iMac sits for a time, it doesn't restart.
Does anyone have any experience with this and can offer help?
My next step is to erase the complete internal drive and start all over, including partitioning with Bootcamp.

OK. Checking the instructions on the link you sent me.
a) I have disconnected both peripherals, the Time MAchine backup hard drive and the USB hub. The only USB connected to the computer is my keyboard. My Epson printer is wireless. There is nothing else connected to the computer.
b) I have tried a safe boot and it gets stuck before it boots up.
c) I did a reset of the NVRAM
d) I am able to boot up from the Snow Leopard OS Cd.
e) I have done a complete permissions repair and a disk repair from Disk Utilites
f) Haven't bothered to plug into an outlet other than the power bar.
g) and the only step I haven't done is to remove the 2Gb Ram I installed several months ago. I would guess it is a third party piece of hardware although I did buy it from my Apple dealer.
h) I have, as the Apple Tech did as well, performed an erase and Install of the OS from the CD and have updated all the software.
I can restore from Time machine and then the computer will restart after that is done.
Sorry, I am not booting up from Time Machine, simply erasing and restoring from it.
Is it possible that something from the Windows partition could have infected the Mac side?
Thanks for the help so far.

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