That confirms a hard disk problem. The clicking is normally a sign of a dead disk. How old is the iMac - is it still within warranty? In any case it may be worth talking to Apple; there have been problems with some iMacs and if yours is one of them Apple will replace the disk for free - http://www.apple.com/uk/support/imac-harddrive/ . But I'm afraid that any data on the disk is almost certainly lost.
Otherwise it's a case of repair man or do it yourself.