Stuck at 'Loop' at login

Using iMac OS X 10.5.8
A few days ago, when I tried to login, the system accepts my password, goes to a blue screen and then goes back to the login screen again. I tried a few times but the result is still the same. I cannot get pass the login screen.

I tried the following using the Installer Disk:
-Use the Disk Utilities to Repair Permissions and also use Disk Repair.
-Perform a Hardware Test. Result given is 4MoT/1/40000003: HDD-1327
I read from somewhere that it means that the fan is not working properly? Does it mean that I cannot login because the fan is failing?

What else can I try?

Thank you for all help!