Can I use imac 2007 which have dead hard drive as a Mac mini display

No, not unless your very good with electronics & can wire up a DVI connection to the LCD, & power the Backlight too.

If just the hard drive is defective you could mke a bootable USB thumb drive or bootable Firewire HD. Not sure of the connecting cables for the monitor functions. This could provide the functions though.

http://www.screenrecycler.com/ScreenRecycler.html