I have exactly the same problem with my Mac mini. From what I've learned, it looks like the hard drive has died. The problem I have is that I thought I could restore it with my Snow Leopard DVD. My Mac mini is a PPC, and I've just found out that PPC doesn't support Snow Leopard and now I can't eject the disc. Holding down the left mouse button whilst re-booting doesn't work.
Try this sequence...
Turn off computer, wait 5 seconds, turn it back on
When you hear the startup sound, immediately press Command + Option + O + F (you need to put down the beer to do this)
Don't release the keys until you see a white screen (or a long time passes and you get thirsty)
You should see a prompt on the screen that says "Welcome to Open Firmware"
Type in: eject cd (press enter)
Wait a tad and hopefully it will pop out. An "ok" should be shown on the screen as well.
Type in: mac-boot (press enter)
The computer will boot normally which, in your case, may be to crash because of the other problem. But at least you'll have your Snow Leopard DVD!
Hope this helps!
(back to drinking)