Unable to install Snow Leopard from original disks
Depending on when you bought your iMac, it came pre-installed with either Mac OS X Snow Leopard 10.6.1 (10A2155) or 10.6.2 (10C2234). It is one of these versions that will be on the original discs you refer to and, based on your lack of success with the retail copy, it is also one of these versions your friend must have as well.

Now, the reason your iMac isn't booting from any of these is that it can no longer run any version of Mac OS X before Mac OS X Snow Leopard 10.6.3.

Why?

Well, the key issue here is that your iMac is one of the quad core models. These were options for the 27" model only and both variants (i.e. the i5 and i7 versions) had a firmware update. Because of your music requirements (as expressed to me via Comments), I am 99.9% certain you installed this firmware update (which Apple recommended all users do anyway).

It is this update that is preventing you to boot from your Snow Leopard discs because the firmware update itself requires as a minimum Snow Leopard (10.6.3). The installers you're trying to use are for Snow Leopard 10.6.1 or 10.6.2.

Solution

IMPORTANT: This solution is based on your comment that you have backups of all your files etc. Proceeding with this will reformat your hard drive - so proceed carefully and ensure you have a current backup!

You can use Target Disk Mode to get around your problem. More specifically:


Borrow your friend's MacBook Pro and ensure it and your iMac are both switched off
Connect the two computers together via a FireWire cable
Start your iMac in Target Disk Mode by holding down the T key on your iMac keyboard immediately after starting up. Keep the key down until you see the icon floating around the screen.
Start the MBP
Once booted, your iMac's hard drive will appear on the MBP desktop just like any external hard drive would.
Insert the Snow Leopard retail disk into the MBP and follow the prompts to install Snow Leopard. Ensure you select the iMac hard drive as the install location - DO NOT select the MBP hard drive or you'll have a very unhappy friend!
When the installation is complete, reboot the MBP again and immediately hold down the Option key. When prompted to select a statup disk, select the iMac's drive and hit Enter.
You're now booting the MBP from your iMac hard drive.
Once booted, use the Apple Menu > Software Update option to install updates.
Keep installing updates until you have at least Mac OS X Snow Leopard 10.6.6 (the first version which includes the Mac App Store).
Once you're running Mac OS X 10.6.6, shut down the MBP and switch off your iMac.
Disconnect the FireWire cable from the two Macs.
Reboot your iMac and update/install whatever software you need to get it working as you want.
Copy/migrate across any files etc from your backup.
Crisis averted!


Obviously the above steps will take some time, but let me know if you run into any problems.

As an aside, if you don't have access to a FireWire cable, or your friend doesn't want to lend you their MBP, you could try Kent's suggestion in the comments. In theory his suggestion should also work.