iMac inconsistenly hanging and showing beach ball This past week, I've been having constant problems with my 2007 Aluminium iMac (2.4GHz, 3GB memory, 320GB HDD). I've been downloading using Transmission, and when (sometimes) stopping or starting a download, my Mac would hang to a state where the Force Quit dialog would not even activate, it would then stay in this state for as long as I let it. I had to force restart every time. After a few force restarts, it lost its start-up disk, and it takes longer than usual to boot up.

I got scared a bit and started backing up the HDD to an external last night. I was busy playing music in iTunes while backing up when I observed the following:


Music would stop playing for a few seconds
The beach ball would start spinning during this time
Data transfer to the external drive would pause
And I would hear a very soft spinning sound in the background, a repeating noise which leads me to believe the HDD is struggling to read/write.


Obviously the HDD has some sort of problem, however, rather than assuming it's failing, can I fix it in some way? Could it be a cache error or file system corruption which can be fixed with a clean install of Snow Leopard? Any way I can fix this without having to buy a new HDD?

BTW. I have run both Repair Permissions &amp; Verify Disk multiple times on this drive, and Verify Disk always returns a green message which states the HDD is fine. Also, S.M.A.R.T. status shows as Verified in Disk Utility.

Any advice would be greatly appreciated. Thanks.
Your own advice is fairly good in this scenario. 
There is a possibility that you have just some serious file system corruption, but usually Disk Utility should catch that. If you want, you can boot into single user mode (CMD S on boot) and it will give you a little file system cleanup command you can run
fsck -fy and then press enter, when it finishes you reboot. 

If this doesn't help, reinstalling after performing a backup is not a bad idea because it will isolate it to a software or hardware issue. The hard drive going over some area repeatedly could be just file system screw ups, but usually repeated noises are a bad sign for a hard drive, clicking etc. 

If the problem comes back after the reinstall you definitely want to look into a new hard drive. Four years is not an uncommon life span for some hard drives.

Also just a quick point of clarification, the S.M.A.R.T status doesn't predict all failures, it just presages specific ones it can determine. Just because it isn't telling you your drive is failing doesn't mean it wont. Keeping everything backed up is a really good idea at this point.