I cleaned and dried the DVD and it looked not too bad. I had learned that when the Apple startup chime sounded, if you right-clicked on the mouse (not a Mac mouse) the DVD should be ejected, and after a few tries, out it came, filthy, but only slightly scratched. I found a 500GB hard drive (from a trashpicked Sky+HD STB) and replaced the 320 GB Western Digital inside the case.( Later this seemed to be working fine as drive E: in the screenshot!) Sadly the IMac's white screen bezel was broken, So I took it off and glued it together as best I could. I had to learn a few Mac tricks, since the last Mac I had used was back in 2002, an IMac G3 with transparent blue case!
It took an age to boot from the OS X 10.7 Lion install disk it contained (this gift keeps on giving!), but I couldn't install the OS, or get the disk to eject.
Last week I trashpicked a Late 2006 White 24" IMac, took it home (weighed a ton to carry it the 200 metres to my home), found a power cable, USB Keyboard and Optical Mouse (all previously trashpicked!), and fired it up.