Is my internal hard drive dead?!? (iMac mid-2007)

Hi everyone,

My aluminum iMac (mid-2007) is behaving strangely recently. I'm suspecting some internal hard drive failure. Here are the symptoms:

1) Difficult wakeups from sleep mode: two times out of three, the spinning beachball appears on each open application, making the iMac unusable, almost frozen. I have to hard reboot.
2) One reboot out of two fails, with the "question mark folder" appearing, just like if the iMac could not detect an internal hard drive.
3) In the Finder, the spinning beachball appeared once with an error message: "The drive has not been ejected properly". Of course I didn't eject or disconnect any drive... There was also an icon "SystemUI Server" appearing in the Dock! I was forced to hard reboot.
4) Made all the usual stuff: all Onyx tests and repairs + Apple Hardware Test full tests + permission and disk repairs + PRAM/SMC reset... No problems detected, but nothing resolved in the end. (The only thing I haven't tested yet is Techtool Pro or DiskWarrior.)

I think this is an internal hard drive problem, but I'd like to have a confirmation from you, forum pros. Would a hard drive replacement fix the problem? Or is the internal drive OK but some connection to the drive not working anymore, making a HD replacement useless? (Sorry if this is nonsense, but I'm not very skilled in hardware stuff.)

In other words, any help would be appreciated. (And my AppleCare expired some weeks ago! Talk about bad luck...)

Thanks in advance for any help!