Sorry for not reading my mail for a while. That must've been frustrating
The flashed iMac still works fine to this date with Mountain Lion, issue never came back nor is there any 'gpu debug info start' line/kernel panic in the logs. Mountain Lion also runs surprisingly well with just 3GB of RAM. Lion certainly didn't.
It's been a while, but I wrote down some of the steps so these instructions *****should***** work. Here they are, let me know if anything is lacking or if you require more help. Also, feel free to try/add alternate ways.
Noteworthy risks:
* Permanent loss of video (wrong flash) and thus bricking/destroying your iMac. Sorry for stating the obvious, I just want people who don't know what they're doing to stop reading now.
* Loss of data (due to repartitioning)
Requirements:
* CREATE A BACKUP OF ALL DATA ON THE IMAC. My apologies for stating the obvious in capital letters yet again.
* Blank CDs, preferably rewritables. You can use rewritable DVDs too but they are very unreliable (different tech).
* The updated ROMs. Extract the updated ROM file for your video card from this updater using Pacifist:
http://support.apple.com/kb/DL938
The ROMs are located here and are exactly 128KiB in size:
<iMacGraphicsFWUpdate.pkg>/Applications/Utilities/iMac ATI Radeon HD Graphics Firmware Update.app/Contents/Resources/ATIFacelessFlash.app/Contents/Resources/K2 M74 ROM 113.IMG (iMac 7,1 ATI HD2400)
<iMacGraphicsFWUpdate.pkg>/Applications/Utilities/iMac ATI Radeon HD Graphics Firmware Update.app/Contents/Resources/ATIFacelessFlash.app/Contents/Resources/K3 M76+ ROM 115.IMG (iMac 7,1 ATI HD2600)
* ATIFlash.exe from http://www.techpowerup.com/downloads/2230/atiflash-4-07/
* A bootable MS-DOS CD.
Ultimate Boot CD will work (http://www.ultimatebootcd.com).
Hiren's Boot CD will likely work (http://www.hiren.info/pages/bootcd).
A FreeDOS ISO has been reported not to work by swmaster.
The iMac cannot boot any non-EFI system from USB so a CD is your only option. The USB drivers on the ultimate/hiren CDs do not work either (at least I couldn't get them to work), hence the need for a FAT partition on the internal drive.
Optional requirements (for a bootable blind restore CD in case things go wrong):
* A Windows OS (probably XP or later). Doesn't matter if it's virtualized, bootcamp or a real PC.
* bootcd.zip from this page: http://www.hiren.info/pages/bootablecd
Dumping the iMac's GPU ROM for recovery in case you need it
0. For reference and verification purposes, take a screenshot of the Graphics/Display tab in System Information or at least write down the ROM revision/EFI driver #.
1. Create a small (1 GB or less) FAT (not exFAT) partition on your harddrive using Disk Utility. This will likely only work if you have less than 4 partitions (MBR limitation) and if your drive isn't encrypted by FileVault 2. Also, live partitioning only works on 10.5 and up iirc. Click on your internal hardrive in Disk Utility, then click on the 'Partition' tab. Resize one of the existing partitions to make some room for a new 1 GB "MS-DOS (FAT)" partition. Then apply.
2. Copy ATIFLASH.EXE (see top of post) to the newly created FAT drive
3. Reboot using one of the MS-DOS boot CDs (see top of post). Even though the iMac does support booting DOS from CD it sometimes has trouble like losing input if you type too fast. For best results disconnect every device but the keyboard, then hold 'alt' or 'c' to boot from the CD.
4. Find out which drive letter your FAT partition got. Type the following commands in the MS-DOS prompt, each line followed with a <return>:
C:
dir
If you get an error on C:, try other letters like D:, A:, B: until the prompt changes letter successfully. After typing 'dir' you should see ATIFLASH.EXE and likely some garbage Mac OS X put on the drive (think DS_STORE, .trashes, etc). If you see something else you might have listed your CD-ROM drive or a ramdisk. Try changing letters.
5. Now that we have set the path of our DOS prompt to the FAT partition on the Mac's internal drive you can dump your card's ROM file.
Use this command do do so:
ATIFLASH.EXE -s 0 IMAC.OLD.ROM
wait until it's done and type
dir
You should see both ATIFLASH.EXE and a file named IMAC.OLD.ROM which is exactly 128KB in size.
6. Reboot back to Mac OS X (use the power button on the back of your iMac, DOS usually doesn't have a reboot command) and collect the IMAC.OLD.ROM file.
(optional from here but highly recommended!)
7. Boot in your Windows system and extract bootcd.zip (see top of post).
8. Put IMAC.OLD.ROM and ATIFLASH.EXE in the 'bootcd/Floppy' directory.
9. Edit the Floppy/AUTOEXEC.BAT file and replace its contents with:
MSCDEX.EXE /D:CDDRIVER /L:X
echo XMSDSK.EXE 51200 R: /t /y
PATH=A:\;R:\
ATIFLASH.EXE -p 0 IMAC.OLD.ROM -scansii
10. Edit the config.sys file and replace its contents with:
DEVICE=OAKCDROM.SYS /D:CDDRIVER /L:X
LASTDRIVE=Z
11. Run bootcd/Build-ISO.cmd
12. Burn the resulting .iso file. If you want to burn on Windows, use imgburn or something similar.
13. Test the resulting ISO by booting from it. If everything goes right it should say 'no flash was necessary' or something like that. If it doesn't get to the ATIFLASH part check syntax in the autoexec.bat and config.sys files or let me know the error here before proceeding any further.
Flashing the iMac's GPU ROM
If you have followed the dumping instructions above you can continue to step 1 below. If you didn't, you can also use the above instructions to create a blind/auto flash disc, just start at step 7 and replace the mentions of an old rom with a new one. ?Perhaps handy if you want to reflash multiple iMacs quickly.
1. Rename 'K2 M74 ROM 113.IMG' from above to '2400NEW.ROM' if you have an iMac with HD2400 OR rename 'K3 M76+ ROM 115.IMG' from above to '2600NEW.ROM' if you own an iMac with the HD2600.
2. Put your 24/2600NEW.ROM on the FAT partition
3. Boot from your DOS CD like before. Follow the instructions in the 'Dumping' section up to step 4.
4. The point of no return. This is the exciting part where you make or break your iMac.
Type the following command if you have an iMac with the HD2400:
ATIFLASH.EXE -p 0 2400NEW.ROM
Type the following command if you have an iMac with the HD2600:
ATIFLASH.EXE -p 0 2600NEW.ROM
This will take a while. If you see a warning, verify the ROM is listed when you type dir. If you get an incompatibility warning you might be trying to flash a 2400 rom om a 2600. You should not use atiflash.exe's force flags but you can look at the help by typing atiflash.exe without arguments. Make sure there were no errors while flashing was already in progress. If so, flash back to the old rom or try to flash again before rebooting the iMac!
If everything went OK, reboot. Yes that's it. Once Mac OS X finished booting you should open System Information->Graphics/Displays and check the firmware version numbers. They should be updated. You're done and hopefully crash-free forever!