I have the same issue with my iMac 20" 2.0GHZ(Early 2006). The front light turns on and I can hear the HD noise and that's as far as it goes (black screen with the front indicator light on). I took out both RAM modules from the slots and power it up, to see what it does. The front light just blinks because it doesn't see the RAM, and that is the only difference.
My iMac 20" 2.0GHZ did not have an internal HD, so I got it from eBay, but did not tested it before I installed it.
I put the my Leopard 10.5.8 Install disk in the DVD drive, but it does the same.
Tonight I will try it with my external HD that has Tiger OS X 10.4.11 (my old "half -dome" Imac PPC's internal HD in an Firewire enclosure). Does anybody know how to boot up from an external HD?
I have a feeling it won't make a difference, since presently, it looks like it only get's to the part of checking wether there is RAM memory, it does not recognize the keyboard. if you have any suggestion, you can email me as well: qsat@att.net