First off, I should have bought AppleCare. I wouldn't be in such a pickle if I had.
 
But that does not mean it's acceptable such a tender young iMac, one
year out of warranty, should fail so catastrophically.
 
In the morning the machine was working. By afternoon all that was
left of what used to be the hub of my family's computing was a glowing
white screen. Genius Bar dudes in the San Francisco Apple store
thought it was either the logic board or the hard drive, but probably
the logic board. They sent me to a nearby Mac shop, Powerbook
Guy, for a second opinion. After some triage the shop told me it was
probably the logic board or LCD. Repairing either seems
cost-prohibitive.
 
To confirm it wasn't the hard drive (it would be worth fixing if it
were just a hard drive failure, obvs) I disassembled the machine (that
was actually kind of fun, learned how to do it via some YouTube vids)
removed the disk, purchased a cheap enclosure from a lovely little
shop called Central Computers, and hooked the freshly housed Western
Digital unit into my MacBook Pro. Hard drive is fine. Damn.
 
So now I have to figure out what machine will take its place. I'm
afraid it won't be an Apple. I'm feeling a little burned and am
unwilling to pay the "Apple tax" for a computer that will only really
be used for music, Internet, and homework for the high school kid. I
will probably end up with a bargain PC running Windows 7 or perhaps
Ubuntu.
 
Too bad. I will miss the iMac, even as I curse its rotting corpse.

UPDATE:  These are some of the things I learned, or at least found interesting, based on the commenting around this post:

1) The fact that the expensive AppleCare extended warranty is quite necessary is rather annoying and adds to the real cost of the machine

2) Bargain PCs are cheaper to fix

3) MacMini might be a good replacement option.  I hadn't thought of that.

4) Some folks think I won't miss MacOS at all if I get a Windows 7 box

5) I may have been really stupid to open up the iMac as I did.  Apparently it's quite difficult to get the screen back on sans dust, even in a very clean environment.  Which my house is not ;)

UPDATE 2: Dwight Silverman blogs about my dead iMac here

UPDATE 3: Tried one last time to persuade Apple to handle the repair out of the goodness of their hearts.  No dice.  Unloading this hulking beast today for $100 cash and a used 1TB SATA hard drive.