Q: Imac won't restore from time machine backup after HD (hard drive) recall replacement

I have an imac bought in 2011, running Snow Leopard.  It required an HD replacement due to the 1 TB Seagate recall - the replacement was done by a certified Apple repair station yesterday.  Before the guy left he started a backup/restore from my latest time machine backup set.  It failed.  I attempted it two times and got error messages that it failed and the computer needed to be restarted to try it again.  No luck.  I called the guy back and he told me to call Apple Care.  Not thrilled about that response since the guy had just left my house I did what he told me to do.  (A quick sideline here:  I recognize that a time machine backup should be no big deal and SHOULD work everytime, but it doesn't.  It irks me that Apple is replacing my HD through no fault of mine and yet they don't allow the restore of data to be a "covered" expense in this process - this isn't just because this was an authorized repair guy - the Apple store would have done the same). 

Back to the issue.  When I called apple care they pretty much had me try the same thing again with an earlier back up set.  To my knowledge, it didn't work.  I say this because it looked like it was working and when I came back to the imac later, it had restarted and once again booted to the OSX install.  (The boot disc is still in the imac).  When I tried to boot from another location, one did not show up to boot from so I assumed that the data didn't transfer and it forced another restart.  So, I tried something else.  I tried to re-install the snow leopard OSX without using the restore function.  That appeared to work and then when the machine restarted it asked if I had another mac and I chose the option to get the files/apps/etc. from my time machine backup.  The computer chose what I can only assume is the most recent backup set (It chose what I know to be a subfolder that appears under the dated backup folder - Macintosh HD--which btw is confusing seeing as that's always the name of the HD on the imac).  I again stepped away from the computer so it could do its thing for two hours.  When I returned, I was back to the MAC OSX screen that asks you to choose a language.  There were no more options to choose DISK UTILITY or RESTORE FROM BACKUP, etc.  When I clicked on English it took me right back into the screen where you say whether you have another Apple that you want to transfer data from.  I realized that the imac must have restarted and I assumed maybe it was because the boot disk was still in - except how do you get the disc to eject?  I also initially assumed that the backup had somehow failed again and triggered a restart.  I tried to choose the option to just set up the machine without transferring data and when I got to the choose a name for your HOME folder message I tried to enter the same name I had it as before and it wouldn't allow me to do so, saying that that name was already in use.  I also tried a different name and that didn't work either - got the same message (I assume if it is not the same name that it won't sync up with the time machine data from the backup set).  So, I almost tried the "select time machine backup" option again until I looked at my HD space.  Clearly, there is space that has been used.  HD space was 997 at the start and now it's 636. My initial thought is to somehow get back into the setup area where I can use disc utility and erase the whole thing and then start over but 1) I don't think it's going to work even if I could get back there 2) I have no idea how to get this thing to reboot into that mode 3) I can't get the boot CD out to even try to restart to see if this thing did what it was supposed to, SO NOW I AM TOTALLY STUCK!  I have not called Apple Care back because quite frankly they were useless the first time.  I have a call into the repair guy but who knows how much help he will be.  In the mean time, I have a million things to do and a computer that isn't working - Whoever said Apples never have issues needs to be seriously censored!

A few other notes:  I use Time Machine Editor to run my backups weekly.  It was set up that way from the get go by an Apple rep who came to my house to get us up and running.  Editor should not effect the way that time machine does its work, so I doubt there is relevance but thought it worth mentioning. 

One other note is that the Apple Care agent tried to have me do something called a "Source" something or other from the disk utility screen but when she realized that my backup file (shown by date) contained many other sub files (11-27-12/MacintoshHD/MyNamesIMAC/etc.), it was not possible to run this operation - thus we aborted.  Sorry I don't remember the name of the process and unfortunately now can't access that option to go find it. 

If you can help me, I would be eternally grateful!  I am open to having a phone conversation if you are willing to give me your email to mail you my number. I have so much work to do this week and this was the last thing I needed.  Did I mention this was supposed to be EASY?

I used to be quite the geek with my PC - still on the learning curve with the mac but not enjoying it.  I am fairly tech savvy and I can follow instructions for a step by step solution if you've got one.