Hard drive corrupted?

My iMac stuck on the loading screen. Having looked on the internet for advice I rebooted it with the install disk and went to Disk Utilties and repaired permisions. I then tried to veryify the disk and it just got stuck so I restarted the computer and the hard drive is greyed out and renamed disk0s2. When I tried to verify it is says that the volume needs to be repaired and ocmes up with the following error message:

"Error: The underlying task reported failure on exit"

Is there anything I can do to fix it? I have loads of photos on there. Typically this happened just as I bought an external hard drive to back up everything.