bad hard drive in intel iMac?

I have an older imac I recently purchased used. It worked fine for a few months, mostly for graphics and internet work. It had been freezing and crashing and sometimes sticking on either the blue, grey, white screens and sometimes the apple with spinning wheel or question mark folder....yep all of these...and sometimes it would start right up. Ohterwise it was a hard start/shutdown with the power button.

I've done the homework and tried all the external fixes as well as firewire target mode but at his point nothing is recognizing the internal drive. Not utilities and not target mode...I can boot from a snow leopard install but cannot reinstall, nor will it recognize the internal for start up.

I'm not very 'terminal' savvy or other stuff like 'single user' mode but even safe and single user did not seem to work out for me. I believe I tried hardware test also which did not run.

Can I just go ahead and replace my hard drive, reformat and start from scratch or is it possible that these issues could be from motherboard or cables. I wouldn't want to buy and replace the hd if there could be another fix. Hope that's all though...I can do the HD replacement no prob!

Thanks in advance!