iMac (Early 2008, 24") is taking about 2hrs to actually bootup, bad HDD?

Good morning everyone!

My iMac (Early 2008, 24", 2.8 C2D, A1225, ATI Graphics) has recently been on the clutz recently. I completely wiped the HDD to start from scratch on OS X 10.5 and it has still been having the issue. The issue is that once I press the power button I can hear the fans, HDD and CD drive spinning but nothing comes up on the display. I checked the diagnostic LEDs and only the first 3 LEDs are on (#4 Stays unlit). I tried resetting PRAM but it does not read my USB keyboard at this state (mysteriosuly it only reads the USB mouse not connected to the keyboard's USBs). There is no chime/dong when I first press the power button either only whats stated above. After I leave it at this state for about 2hrs it finally bongs and starts up normally, works without a problem and all 4 diagnostic LEDs are now on. I can restart it with no problem but if I select sleep or shut down it'll go back to the fans and HDD only with nothing on the display. Can anyone help me out with this issue? I am really hoping it's not the logic board or something big but any input in appreciated. Thanks!