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You have a few choices - remove the hard drives and bin the iMac, attempt to repair the graphics card yourself by baking it as I did (see the internet for details) which worked for me, or take it to a trusted iMac repair centre - probably going to be expensive.
 
OP asked:
"What do I do if the Mac has a bad GPU?"

You can try the "baking it in the oven" trick as described above.
or...
Perhaps it's time to be looking for a replacement Mac... :(
 
I paid for Apple Care when I bought the imac in 2011. Would that not cover the cost? I never once brought the computer in for repair.
 
Crystal Disk Info showed the hard drive is in good health.
That doesn't mean a thing. I have not seen one of these HDDs from a 2011 that is still good.
Are you sure that it is a MD063LL/A?

I do not see that model number for a 2011 iMac. I do see a MD093LL/A which is 1 digit difference, but that is a late 2012 21.5 " iMac 13,1. All of the 2011 iMacs start with MC not MD.
It's a mid 2011 27" i7 iMac.
https://everymac.com/systems/apple/...inch-aluminum-mid-2011-thunderbolt-specs.html

Disk Utility said the drive was fine.
Again, doesn't mean a thing. DU says this disk is fine, also. I tested it in a TM capsule but after I pulled it from a 2011 iMac.

full.jpg

If your disk is fully OK from disk utility - it's your graphics card as I said earlier ........... known issue on 2011 iMac look it up online.
Perhaps. The culprit is the HDD. Its excess heat is the cause of GPU problems in these. The solder joints get stressed after extended periods of overheating and cooling— that's why baking so often works.

The fix is to remove that spinning heat pump, replace it with an SSD. The job takes an experienced tech well under a half hour. A 2TB SSD with the OWC toolkit, temp sensor and a CR 2032 NV RAM battery costs around $350. It's an easy DIY.
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Applecare expires after 3 years from purchase date of your 2011 iMac. It would have expired by now.
Correct but, with AppleCare, one received a copy of TechTool on the AppleCare CD in 2011. Being on OS 10.6 or 10.7, it should still work. The above screen shot was made with TechTool Pro.
 
Correct but, with AppleCare, one received a copy of TechTool on the AppleCare CD in 2011. Being on OS 10.6 or 10.7, it should still work. The above screen shot was made with TechTool Pro.
Okay... :confused:
TechTool is a good software tool, but it will not cover the cost for repairing a GPU problem which was the question from the OP that I was answering.
 
And, once again, you missed the point.
I disagree.

When you click the "Reply" button to my post I get an alert that my post has been quoted which means you are making a comment to me and I should check the thread and respond. I was just replying to you comment to me. If you are not replying to me, then don't reply to my post. Simple.

Your point about using Techtool from Applecare is a good one, but it has nothing to do with my post #29. It was a waste to reply to me and send me an alert. Just make your post about having access to Techtool from the AppleCare package to the OP if that is your intent.
 
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