Mountain Lion install results in blank gray screen.

I recently downloaded and installed Mountain Lion on my wife's late-2007 iMac.  Unfortunately, each time, after the installer finishes and reboots, the computer sticks at a blank gray screen where normally the Apple logo would appear while things boot in the background.  I have tried restoring from Time Capsule and re-downloading then reinstalling, but it produces the same result.
With the gray screen problem present, I've tried a Safe Boot, holding down Option to select a disk to boot from (nothing comes up when I do this, just the mouse cursor), and resetting the PRAM/NVRAM.  I haven't really been able to find anyone else having this particular issue. The hard drive in the iMac is a little over a year old as we had to replace the old one.  And from what my wife read, the late-2007 iMacs are Mountain Lion compatible.

saw this in another thread about a macbook pro slowing up after OSX Mountain Lion install:
the  mac owner had mentioned his mac going very slow, and was told it could take several days for the new OSX to sort things out. Perhaps this explains my issue and perhaps yours.
"Yes this can be the case, even slow shutdowns and startups. But Hardisk space can also be a factor. Anything below the 10Gig mark of space left can cause extreme slowdowns."

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