I'm on an Intel iMac running Lion.

I'm having major issues with my iMac. The iMac froze whilst using Chrome, and I was forced to reset it.

After the reset the screen seemed to freeze on the apple logo, with the spinning wheel. I've followed several steps on different sites with weird results.

* I've reset the PRAM/NVRAM as Apple suggested.
* I've tried a safe boot, the progress bar got to about 35% then gave up and showed the screen I have now
* Tried booting from an install disk (Snow Leopard) to use Disk Utility. This produced a Kernal Panic error message.

The weird thing is that the computer behind the screen seems to be running fine. I've SSH'd in from my laptop and logged in fine, it all seems ok.

I've tried running ***fsck*** like Apple suggest but it says it can't perform a repair because the disk is in use.

**UPDATE**
I've tried booting up in single-user mode and running */sbin/fsck -fy* and it says that everything is fine, but if I try exiting and booting again the same issue persists.

So any ideas on what I could try next?