Mystery start up hang issue in 10.6.8 -- only to Beach ball or Safe Mode [View all]

I have a 2007 iMac (which I love, 24", the classic acrylic, aka "white" case, great screen) and it will only start up successfully in safe mode. It is running 10.6.8. I went down the list:

- zap PRAM (did that)
- run check drives (fine)
- start in safe then in normal again (safe mode fine, then SBBOD again)
- check hardware components
- create new account and start up in that (still hangs)
- go back to original keyboard and OEM mouse
- reload from the OEM disks (failed)

Pretty much everything I had read plus everything I could think of but it is still going to a spinning beach ball when I start normal. Goes through all the screens - logo, blue, then it hits the grey screen and the cursor sits in the upper left, eventually the frozen cursor becomes a spinning beach ball that you can mouse move and that's it. Like it gets through almost all the loads and then it beachballs.

In safe mode all the hardware seems to work fine. I don't have an OEM mouse for it (but the SBBOD is movable with the one I have).

Argggh. It is killing me. It went into this state in January and I bought another machine in February after spending many hours trying to get the old one out what seems to be one mystery issue which is eluding me. Now I just kind of want to know what it is/was. Plus when that machine is working well it is beautiful -- case and screen like-new.

I'm haven't opened the case yet. Possibly a fan is off/stuck or the drive is starting fail (?) A good cleaning can't hurt.

I tried to reload the original OS and that seemed to fail -- first couple dialog boxes, loaded for a while then went to a freeze.

Any thoughts, experiences or things worth trying are greatly appreciated!