Hi Leon,
It was deja vu all over again reading your problem since until 5 minutes ago I had the exact same issue. I tried opening the iMac back up, checking the airport card connection and even repaired the tears I had made in the shielding with aluminum tape all to no avail. I got it working again by doing something very odd that I read in a post somewhere about I think a MacBook Pro:
Try logging onto your airport with airport utility and take it off the "automatic channel" setting in favor of a specific channel (I happened to choose 6). For reasons I don't understand this fixed the problem for me and I hope it will do so for you, too!
-Bob