LATEST UPDATE:
Tech just got back to me to advise that there are several bad sectors on the hard drive. So the best/cheapest replacement is going to be a Seagate ST1000DM003 1TB BARRACUDA 7200RPM 3.5" 6GB/S to the tune of $90 (+ $75 labor).
Apparently my information from forum discussion 2 years ago regarding reinstallation of software is not as informative as I thought it was: Time Machine can restore my iMac's condition but it can't install the software to make the recovery. So that's going to run another $100+ for the tech to install OS X 10.7.5 (unless somebody out there has a better and immediate solution).
Had I known that, I would have constructed my own recovery partition on a separate hard drive for just that purpose (and once I get the iMac back and functioning again I will do so, after checking via Google or Apple how to generate such). C'est la vie.
