I can sympathize, Mikebike125 -- my 24" Early 2008 iMac recently had the same fate. It would boot and work in Safe Mode, but in my case, wouldn't even boot in normal mode anymore. I'd been dealing with a semi-failing GPU (ATI Radeon HD 2600) for awhile, and recently had noticed many, many more GPU DEBUG INFO dumps and ERROR IN SLOT 1 errors in the system log...
Anyway, I did find a possible explanation for why yours and mine worked in Safe Mode but not booted normally. I read somewhere that Safe Mode disables hardware acceleration in the graphics card. I believe we had a hardware fault in that circuitry of the ATI card.
I still liked this iMac a lot and really hate to see it go. I have the skills to replace the card myself, but I'm not sure it's worth the cost, and more importantly, suspect that any card I put in would fail pretty soon, too. Sigh.