This is exactly what mine did. Reason my hard drive had crashed. Depending on what hard drive you have, if you have a seagate apple is having problems with them and is replacing them free of charge. You can find on apple site a place to put in your sn for your iMac to see if you qualify but when I did it it said my iMac did not qualify b/c I didn't have a seagate drive but when I took it in to be fixed it turned out I did have one so it was replaced free. So not sure how accurate their records are when you put in your sn. Just search their site for hard drive failure being replaced. Hope that helps some.
Please carefully read:
However the previous posted is probably correct, your HD may have failed. Whether it is covered by a recall or not the previous poster is not totally correct, there were some machines affected however most iMacs produced with Seagate drive are not. You can tell if your is by going to: