What is wrong with my iMac?

Seems like your hard drive is failing, I would do time machine back up. Then run disk utility and try repairing the drive..

You can also try running Apple's Diagnostic Software If you have your recovery disks, the software will tell you if any of the internal hardware is failing..

As a last resort you can also format and do a fresh install of OSX..

"Any suggestions?"

Have you tried rebooting (right down to a cold shutdown, power off, then press power-on button)?

Have you considered defragmenting the drive? Disregard what others may say re "it's a Mac, it doesn't require defragging". It WILL help.

It _might_ indicate that the hard drive is having problems. Have you tried opening Disk Utility and checking the "SMART status" of the drive?

Have you tried repairing permissions (in Disk Utility)?

Have you tried booting from an external source and then used Disk Utility to repair your internal drive?

I aggree with Yamcha, just had to replace the HDD in my mid-2007 iMac. Exact same symptoms for 2-3 days, followed by a total loss of the HDD. Runs smooth as silk now.

Note, I know Apple had a 1TB recall at one point, not sure if 500G drives ever got brought into the re-call. http://www.apple.com/support/imac-harddrive/

I'd open up activity monitor and check CPU usage, memory available for use, and see if any apps are hogging stuff up. It could be a hard drive going bad, but it could also be excessive swapping. If it can't be tied to a process, memory over consumption, or an over active process, then I'd look at the drive.

I made my first post today because my hard drive died (2006 iMac) and I'm considering replacing it with an SSD. We used Scannerz to test it because it can detect system problems as well as drive problems. In your case, it sounds like a true drive problem (in fact, it sounds almost exactly like what was going on with mine). They have an interesting video that shows two different problems - one is a hard drive that's bad and another is a system with a faulty cable. Both can act alike but they produce totally different test results.

A link to the movie is here:

http://www.scsc-online.com/Videos.html

Start up or download the "Advanced Features Video" and once it loads, fast forward over all the crap about the logging window, preferences, and drive probing and go to the part where they compare a true hard drive problem with a cable problem. A lot of problems can act like drive problems when they're not. If you're in the US, they do offer tech support at no cost. I personally wouldn't bother with their "Lite" version of the product because all I think it does is give someone a pass/fail so they can take their system to someone to get it fixed. It's only benefit is it's cheap, as far as I can tell.

If it is the hard drive, check and make sure your unit isn't one of those "special" iMacs made a few years ago. "Special" in this case means it will only take a certain type of drive (maybe someone else can chime in on this...I don't remember the details).