Tried everything I can find, iMac won't start up!

Question

Yesterday, my iMac told me there were new updates to be installed, and some of them required the computer to restart. So I clicked ok to update and restart, everything went along normally until after the updates, when it tried to restart, it won't get past the white screen with the gray apple logo and the little spinning wheel underneath it. I have been searching these forums all day looking for answers and trying anything I've found that I think might help, and nothing's working.
The closest I've come is this: I put in the install disc (1), and tried to restart while holding option. This allowed me to click on the disc and start it up from that, and I went into disk utilities to try and repair the disk, as suggested in this thread http://discussions.apple.com/thread.jspa?messageID=8807992&#8807992, started by someone who seemed to be having a similar problem.
When I tried to "Repair Disk," it said "The Disc "Macintosh HD" could not be unmounted."
I tried "Verify Disk," and this is what it said in the little box (everything in bold was in red on my screen):
Performing live verification
Checking journaled HFS Plus Volume
Checking extents overflow file
*Invalid leaf record count*
(It should be 198 instead of 187)
Checking catalog file
*Incorrect block count for file pcsd.pub*
(It should be 16 instead of 17)
*Invalid sibling link*
*Volume check failed*
*Error: Filesystem verify or repair failed*.
Then a box poppped up saying:
First Aid Failed
Disk Utility stopped verifying "Macintosh HD" because the following error was encountered: Filesystem verify or repair failed.
Also as suggested in that linked thread, I then tried to "use the Restore tab in Disk Utility to make a full copy of my internal drive volume to an external drive volume," but it told me "Restore Failure, Could not restore - read only file system." Does this mean my external is read-only? It is brand new and has never been used, just plugged in for the first time to do this. Do I need to do something to the external to make it work? Is there anything I can do short of erasing and re-installing everything?? I'm completely at a loss here, and I'm sorry this is so long but I wanted to make all information available. Any help would be greatly appreciated!!

Answer 1

Would that have worked if I had tried it before the "archive and install"? Because that is what I tried next and it didn't work, and I'm just wondering if it didn't work BECAUSE I tried to do the Archive and Install first? Or if it just never would've worked because my hard drive's messed up?
I'm just wondering because after I got the last response, I called Apple Care to see if there was ANYthing else I could do before having to either erase everything or actually haul it down to the Apple store, and it's the Apple care guy who told me to try the Archive and Restore first. So I'm just a bit annoyed if this could've been avoided by simply doing a new install first, if it's the Archive and Install that ruined everything...