imac overheating

My 2010 intel i7 iMac 27 with 8GB Apple factory RAM has Parallels installed and Windows 7 as a virtual machine.

It was working normally, then overnight it shut down and presented a gray screen.

No response to the keyboard or mouse, but when I plugged in a USB memory stick, the Parralels prompt asking whether to open the stick files in Windows 7 or Apple appeared. Removal of the stick gave a prompt that it was bad to remove the stick improperly. So the logic board was functioning.

Hard shutdown and reboot made no difference, still gray screen. A small red and white icon was bouncing in the lwer right part of the screen as bootup was trying to occur, but no bootup actually progressed. Hard drive was active initially, but ceased after 10-15 seconds.

So I shut the iMac down and next morning, i removed all the periperals and USB devices, then powered on. It started fine, all software returned after a long load period, and has been normal since.

I do notice that the upper air flow holes and the top of the aluminium case are gettin hot after 20 minutes or so of use. After an hour the top is very hot to the touch...it is over 110degF of our medical Thermometer ...I would say its maybe 140degreesF.

This seems pretty hot. The fans are running very gently.

Is my imac overheating and causing this shutdown. Seems likely to me. Is this a manufacturing defect? Due to a recent software OS update? Is there a solution.

My fans used to speed up when I was in Snow Leopard, but since upgrading to Lion, there has not been evidence of that. Seems like software programming error perhaps? Should I go back to Snow Leopard on my original install disk?

Any other remedies?

Thanks for any help. This seems like a life-threatening situation for my expensive iMac.