I can't start hardware diagnostics, iMac2009 gfx fail, DHCP fail

I have a tough situation. The iMac (late 2009, i7 2.8GHz, 8GB RAM, 1TB HD, Yosemite) will not start up correctly at the main console. I can use SSH to login from a remote device and the machine appears to function normally. I believe that Screen Sharing is enabled, but I can't connect (timeout error). On boot, the system sound happens, the Apple logo comes up and the boot line begins. After a normal amount of time, the boot logo disappears and the mouse cursor appears in the upper left hand corner. The screen stays grey and blank. On rare occasions, the login screen will appear before the system hangs. Otherwise, nothing is available at the console.

I have tried hardware diagnostics by pressing the "d" key after the startup sound. The machine does not appear to start diagnostics. Target mode does not start either. Recovery mode does not start either. I have two keyboards. The normal one is Apple's bluetooth keyboard and Magic Mouse. The second is a Microsoft USB keyboard (no option key, only Windows key). I have tried to start Diagnostics with both. It is possible that something is happening that I can't see because of the grey screen condition. If Apple Hardware Test runs, is there a place where errors would be logged?

Another odd problem comes up with regards to diagnostics. I normally use wireless for this machine and that continues to work fine. I connected the system to Ethernet and the system would not receive a DHCP address. By setting the address manually:

ifconfig en0 inet 192.168.XX.YYY netmask 255.255.255.0

the system functions correctly. The manual IP address does not appear to hold across a reboot. Is there a better way to set the network address from the command line so that it will hold through a reboot, or how to kick the system to accept a DHCP offering?

The system has a Seagate hard drive. It was replaced two years ago under the recall program. I have no idea if the disk was formatted for hardware diagnostics. The lockup condition started a while back where the computer would freeze while running a browser or a movie or whatever. It was always available from SSH, so a reboot would return the system to normal functioning. There has also been a hard disk issue which has occasionally caused the machine to freeze while indexing. It has been annoying, but not enough to fix it. I have fixed permissions and run disk utility tests and checked SMART values. No indicators there.

I have access to the machine through SSH and can run any tests from the command line that might be helpful. Does anybody have an idea of where to start?

Thanks in advance. -John