wheel of death after bootup

Hi! I have an iMac I purchased several years ago that has been working great until recently. Whenever I bootup, it takes ages, but once I log in I get the wheel of death. Sometimes it goes away within a few minutes, but starts again as soon as I move the mouse. I am unable to do anything or even log in remotely from my laptop (which I was able to do before).

I have already checked the Ram, but that doesn't seem to effect it. The local repair shop is going to charge $35 to look at it, but I would rather repair it myself if I can. I really hope it's not the harddrive, I don't have $250-300 for a new one.

Any ideas?