Sigh, I just posted a long reply to richsadams, thinking i was in this thread, when i was in an older, shorter thread on the same topic.
here is my original reply:
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The bottom line is that Apple orphaned this iMac line very early on, having made a bad engineering choice with respect to the graphics card, which is an unusual form factor not shared by other models of iMac. (It's not, by the way, really an 8800gs -- it's actually an 8800M GTS, or maybe GTX, ie. a laptop GPU). By 2011 it was clear that they had a serious problem on their hands, and they did NOTHING to protect the customers who owned the machines. In particular, they did not work with any of their suppliers to ensure the future availability of any newer model of GPU on the same form factor. Instead they charged increasingly ridiculous prices to replace the original card with a comparable card (that might even have the same engineered-in flaw). If your iMac went bad in 2012, you were looking at spending something in the mid-300s to mid-400s to replace the card with a technology with half the performance of cards selling for $150. It was outrageous. I have a 2008 iMac with a beautiful monitor and a fully functional motherboard, and it's been nothing but a paperweight since 2013 because Apple decided it was okay for a 5 year-old machine to be scrapped.
The exact circumstances of this engineering snafu are well understood -- there's a website devoted to it, nvidiadefect, though it can take you about two full days of searching and reading to get the full picture -- and I'm sure everyone at Apple knows exactly what happened and why. Someone at the company made an explicit and conscious decision that the owners of these machines would be hung out to dry as their GPUs failed. According to at least one user, the official story was that Apple <i>did</i> have a replacement program for the same cards in the Macbook Pro, but inexplicably didn't include this iMac model in the program. Moreover, according to the founder of that site, Apple personnel routinely told UK customers that they had no recourse, when UK law indicated that Apple WAS liable for replacing the parts, regardless of the official warranty period.
I can, indeed, go ahead and buy a brand-new (i think) hilariously outdated Apple part 661-4664 for the entirely unreasonable price of $295 (not including installation), because Apple orphaned the form-factor and left its customers in the lurch. As someone who has been using Macs since 1985 (first workplace machine was a 512K fat mac, with an external floppy drive, oooooooo!), my disgust at this particular choice by a company with literally more money than it knows what to do with is and shall ever be boundless.
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I have an addendum to that reply, which is this: You can right now buy an identical 8800M replacement card for your HP laptop (LOTS of laptop manufacturers had this problem, none that I know of dealt with it very gracefully), for $110, the only problem being that its flash rom firmware will not be compatible with your iMac. In other words, Apple is charging you a $185 premium for the honor of being an Apple customer who was sold a defective product. The existence of the HP card makes it perfectly clear: Apple could sell you a replacement card for $110 without losing any money, but that is not good enough: They insist on profiting handsomely from this defect.