Does anyone have any experience repairing iMac's this one had a malware issue to start with, but as couldn't do anything (this may be related to what follows) I with the customers consent, wiped the os x install and tried to use the recovery to re-install, no luck, so I got hold of an osx install disk, and nuked the mac hd, only to find, the system now crashes whilst trying to load and/or install osx.(edit: it was doing the same before I nuked it) sometimes the osx install screen comes up, but then crashes and turns off, I have noticed the picture that loads, sometimes displays normally, but most of the time, it shows the picture with some of the colours being orange instead of purple. To me this suggests a fault with the video card or memory, although I have tried both sticks of memory individually, and in different slots, but same things happen. seeing it was very dusty, I have opened the machine, and cleaned it out in case it was an overheating issue, but made no difference. anyone have any suggestions? the video card is removable, and is either a radeon 2400xt or 2600 pro, and looks like it may be an mxm3.0a card.
try changing the hard drive and installing off a usb stick - what OSX are you putting on there? I have a usb of mavericks which I've used maybe 30 times and never had an issue, but installing off CD I have had issues in the past. So stick in stick, turn it on and hold option, then choose the usb stick, and install osx as normal
the installer i'm using is 10.5.1 I think is snow leopard, I have made a usb one, and it still fails i'll see if I can find another hd to stick in it had to use transmac to make the usb stick as I don't have another mac. I did try and make a yosmite install disk, but only had access to mobile broadband where the mac was, and after 2.5 hours the download failed at 2gb (its a 5.whaterver gb download)
Nearly every one of these iMac's I have worked on has needed a replacement DVD drive. Try installing with a USB drive and see how that goes.
i'm sure I have a spare drive around somewhere have made a usb installer, which also failed to work, same issue crashing before or during install
Probably not relevant given you say the GPU is either a 2400xt or 2600 pro, but there's a replacement program for dodgy 6970s in iMacs: http://support.apple.com/en-gb/HT203787