2007 iMac Blured Screen of Death

I'm running OS X 10.10.1 on a 2007 iMac (intel based) I have tried to boot into the recovery HD, but it just continues with the boot as if I have never pressed cmd-r. It finally boots to a screen with the spinning beachball of death and a blurred background. I have reinstalled the ram twice, and have reset the NVRAM and PRAM.

Thanks for any help or suggestions.