iMac kernel panic

I am experiencing recurring kernel panics on an iMac 27". It won't even boot in safe mode. I tired to run Apple Hardware Test from the DVD but the test hangs after a few seconds.
I removed the RAM cards from the iMac and installed them on a PC and ran a memory test with no problems.
When the machine is cold it boots and runs for a few minutes (< 6 Minutes with heavy load). I was trying to monitor the CPU and other temperatures with a program and they all seem to be in the normal range: CPU core 1: 40 degrees, CPU core 2: 35 degrees, and northern bridge: 51 degrees.
I am now out of ideas and would appreciate any helpful comments. Screenshot is attached.

I had a chance to verify the HD with Disk Utility just before the kernel panic and saw no problems... I guess I'll have to take it to the apple store anyway.

I have Snow Leopard and it won't boot in AYN mode.

My guess is that it's something with the CPU itself or the cooling as it even fails to start up from the DVD.

spaziobds said:

Had the same problem last week. Had to change HD. Went to Apple Store, hooked the iMac to their network to run hardware test, found out in 2 minutes. Had spent about three days trying to find out what was wrong

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