iMac white screen vertical pinstripes

I was using my iMac yesterday as usual. Browsing the internet, listening to music through iTunes when all of a sudden the screen 'glitched'. I had vertical stripes on the screen, the picture was broken up and I couldn't interact with anything. I rebooted the iMac and it still had vertical stripes on the screen. I could see the apple icon and the loading bar which was duplicated/broken up on the screen. Once the progress/loading bar reached 100%, I just got a white screen. I had to go out and when I returned 5 hours later the iMac still had the same issue.

Some of the things I've tried are;

1. Leaving everything unplugged for a few hours, reconnecting everything and booting up again (wishful thinking).

2. Holding CMD+SHIFT+R+P after turning the iMac on then running Disc Utility on the iMac HD. I get a "This Disc needs to be repaired" message but unfortunately after clicking "Repair Disc" the tools runs for a bit before telling me "Disc Utility can't repair this disc" (screenshot attached).

I was going to try "Reinstall Mac OS X" for Mac OS X Utilities (CMD+SHIFT+R+P) but it kept telling me I couldn't as I wasn't connected to the internet? Also I was worried this might delete all my files?

The most important thing I'd like to do is get the files off the hard drive. I'm hoping that's possible as although I can't get to the desktop it looks like I can access the drive in Disc Utilities. I've heard I might be able to connect a macbook to the damaged iMac and get the files off it that way? Is this achievable using a Firewire cable?

Cheers, hope someone can share some advice.

Steve

Photos of messed up display: