Blinking Folder with question mark, no boot options working

Greetings,

My iMac went koo koo & I think the HDD may be bad. At start up, it immediately makes a series of "clicking" noises & eventually the blinking file folder with question mark appears. This is as far as it will go. I tried several reboot options during start up, all of which failed (Command "C", Command "S", Option/Command, and a few others). Can't even get a menu screen to try & fix anything. I rebooted from the installation disc & got it back working for ONE day, like nothing ever happened and now its doing the same thing again (blinking folder with "?". it clicks, then spits the CD back out at me, then the folder with "?" appears again. Is it salvageable?