2006 iMac runnng 10.6.8 imac won't install 10.7 Lion

I have a 2006 iMac running 10.6.8. I purchased 10.7 (to run some financial software). I have enough memory and the right kind of processor (see below). When I run through the process of installing, it will get to the 'installing' part, start at 36 minutes left, get to 35 minutes left then flip to OS X utilities, sometimes with a brief view of the start page (choose language, etc). I have reset PRAM, checked permissions, and restarted the thing way too many times to count. I have seen recommendations to wipe the hard drive and then install, but I don't really want to do that. This has been going on for a few days now. I would love to have this simple upgrade and I was under the impression that I could install 10.7 over 10.6.8. Any ideas?