iMac restarts instead of shutting down

Hello,

I have a 2009 iMac 24" running 10.6.2. When I select shutdown from the shutdown menu it asks if I want to shutdown and then after selecting yes it starts the shutdown process. After shutting down it immediately restarts. When selecting shutdown from the login screen, it shuts down correctly.

-I've zapped my PRAM
-I did a SMC reset
-I've unselected restart after power failure
-I have a wireless USB mouse connected
-I have Apple's wireless keyboard

Any thoughts?

Help is much appreciated