A fan runs continuously on my 21.5 3.2 iMac. It started after I replaced my optical drive. I tried hardware test and got an error code 4SNS/1/C0000008: TLOp--124. Can't find what that means anywhere on Apple site. Otherwise the machine works as it should.

It's a sensor warning probably caused by installing a drive that does not have the required drive sensor that is required on the newer iMacs.

You need to determine which fan(s) is the running out of control. AFAIK, the only fan/sensor involved when replacing the drive with a non-apple one in the current iMacs would be the drive fan, not the optical. You may have disturbed the cable from the Logic Board to the drive, or it may be you didn't replace the sensor on the new optical drive, or that cable was not connected back properly. Get iStat Pro to see the fan speeds.

http://www.islayer.com/apps/istatpro/

First thing I would check is if all the connectors you removed to take out the drive have all been re-connected (correctly.)

And, check that any other connections weren't accidently dis-connected.

I agree with most of the comments aboge. The heat sensor on the optical drive probably fell off or got damaged/disconnected. I'd check that.