I have this problem too, which started during Migration Assistant. The noise was impressive -- louder than an Xbox 360 -- and continuous. iStat showed the HD fan spinning at 3400rpm, so it's going back to the reseller on Monday, and swapped out the same day.
Add another problem to the imac I7s! Fortunately, everything else seems okay.
My fan speed starts off silent (and does this if you put the machine to Sleep and then wake it up), but gradually gets louder over the course of 30 minutes.