iMac 27-inch Retina in perpetual kernel panic following failed upgrade to High Sierra

The iMac 27-inch Retina Late 2015 intel system failed to upgrade to High Sierra and got stuck in perpetual kernel panic. System failed to boot with USB installer (both Sierra and High Sierra). Macintosh HD is NOT visible so cannot do disk repair. Tried target disk mode to view Macintosh HD on an identical iMac using thunderbolt cable but the host iMac also entered kernel panic! After disconnecting the thunderbolt cable I was able to recover the host IMac. Now I booted the healthy iMac in target disk mode and tried to start the faulty Mac using the option key. I could see the Mcintosh HD of the healthy Mac as an optional startup disk on the faulty Mac but still could not boot it. At this stage I started the diagnostic on the faulty Mac and it reported all ok and prompted to proceed and boot in recovery mode. However it fails to boot after selecting continue. The progress bar goes just about 5% and the kernel panic appears again! really sad.