Stuck at gray apple screen with spinning wheel after clean install Lion

So, I've been having some trouble with my MacBook, kernel panics, hanging, spinning wheels, etc, etc. I decided to do a clean install of Lion and pull over files as necessary from an external, but otherwise restore to its factory settings. Restarted with command R to bring up recovery mode. Disk utility. Erased the drive and reformatted. Reinstalled Lion. It took forever to download. Like 4-5 hours on a cable connection (albeit a slower one). After the download, the computer told me it was restarting itself, which it did. Then it booted, got the chime, the gray screen with the apple logo and spinning wheel, and.....nothing. It just stays stuck on this screen. Thoughts? Hard Drive? Ram? Do I try again? Replace the hard drive? It's only 8 months old and I bought it straight from the Apple store who installed it. Covered under warranty?