Imac running 10.3 cann't load from system restore dvd

Hi All,

I am having major issues with my 3 year old imac. At first I noticed I was having memory problems so I backed up all my info and tried the apple hardware testing cd. On the memory test it failed and the screen turned black (whereby not finishing). I shut down the computer and tried to load from the system restore DVD but whenever I do it says that I need to restart my computer. I am however still able to logon to the computer normally, but I have the same issue if I open the dvd from my account, because once it restarts it tells me I need to restart the computer before it can load the dvd.

What else can I do to wipe my hard drive clean and start fresh (I will resort to extreme measures if necessary)? Or does this sound like a hardware issue that I have to fix first? Thanks.

Cheers,
ScKaSx