imac problem: squares on screen

I have this Imac since june 2010

the squares on the screen started with few and then after restarting the computer they spread all over and now i am not able to see anything on the screen. i have tried to use os x install dvd which comes with imac and it doesnt work( couldnt eject the dvd so i had t use mouse and restart botton to take the dvd out) and tried to run AHT (by holding D key and restart) but it didnt go through since i can not see anything on the screen anymore. where i live now doesnt have any apple store/support. could someone please guide me to find out the problem. is it the LCD or hardware problem?