Mid-2007 iMac won't boot
Sometime yesterday my iMac suddenly locked up. I had to hold down the power button to shut it down. When I rebooted, the boot-up was very slow, and when my desktop appeared I got a message saying "activateSettings quit unexpectedly." I had to force another shutdown. This happened two or three times. I attempted a disk repair. The verification step reported a disk problem. I tried to repair and got a message saying the disk could not be repaired, and suggesting I reformat.
Before I wipe the hard drive I want to make sure this is my only option. Is it worth taking it into an Apple Store? Would they have recovery tools that I don't have? I'm in IT but I'm more literate in Windows than in Mac, so any suggestions are appreciated.
iMac, Mac OS X (10.7.3), 4 GB RAM