mac won't turn on SMC issue or power pack issue?

Using my iMac today working away and all of a sudden the screen went black, there was no power to the computer at all. I have checked the fuse and that is ok. I am getting power to everything else. I reset the SMC as per Apple instructions on their website. Again nothing.

I then left it turned off for a good 5 mins and then turned on the power. The fans turned on and the mac then chimed, the creen came on and I thought everything was ok. Then the computer turned off, fans and hard drive sped It didnt even start booting to the Apple logo or the log on screen.

I am thinking this is a power issue within the computer and this will need to be replaced. I was wondering if anyone else has had this problem. My iMac is a 2008 21inch iMac. It is connected to a APC UPS which again all power ports are working, as I have tested that with a desk lamp. What I do normally is turn the UPS when I have shutdown my Mac in the evening and then power it up next day. While the UPS is doing is power self test I then boot the Mac, I am wondering if I should just leave the UPS turned on all the time and just unplug my iMac when I am not using it. Sometimes I do pop it to sleep last thing at night, but recently I just turn it off.

It has had heavy use so I am wondering if it is indeed curtains and I need to buy a new iMac. Maybe it is an excuse to buy a 27inch one! (Would be nice)

Thanks for any help.