Hi, and welcome to FineTunedMac.
Sorry to hear about your problem.
Just to be be certain that I follow you, were you able to boot from your install disc, and, if so, what steps did you perform while booted from it?
Also, have you updated/graded you version of OS X recently? (Edit 2: Which version are you running?)
Edit: And have you run your Apple Hardware Test disc?
(Sorry; I'm a bit slow tonight.)