iMac 2008 Overheating and Very Slow

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Hi All - I'm new to this forum and am looking for some advice from you guys.
I have an early 2008 iMac with 20 inch screen with 4Gb RAM, running El Capitan.
It has started running incredibly slowly and the casing is getting very hot.

I have run the Apple Hardware Test and it has identified the following error:
4MOT/1/40000003:HDD-1366
I understand this error to mean that there is an issue with Fan Motor of the Cooling Fan for HDD0.

I am considering:
1. Upgrading the RAM to 6Gb.
2. Replacing the HDD with an SSD drive.

My questions are:
1. Is the fan separate from the HDD and will I need to replace the fan itself?
2. Are the upgrades worth it or should I cut my losses and invest in a new machine?

Any advice would be appreciated.

Regards

StripedOne
 
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Waiting for the newest Mac is not my advice. Each iteration of these laptops removes some feature we rely on, like the CD drive, Firewire, connecting ports, etc. in Apple's ill-advised attempt to bring the machine down to the thickness of a magazine page with the highest profit margin. Pick a better Mac, like the 2015. I, too, have an early 2008 unfortunately upgraded to El Capitan. It's a crawler even though there's no hardware issue. No overheating, just shamefully slow. El Capitan loads over 300 programs into RAM at boot which is why it's so slow. OS X 10.8 is the ideal operating system for an early 2008 MBP. If you want to go to 6GB RAM you may not be able to. I just bought the recommended 4GB chip for that from Other World Computing and the inset slot is in the wrong place for the early 2008. Discovered it last night; they're coping with that today.
 
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But the op is using an iMac, and would consider waiting for a newer iMac model.

Additionally, most folks do not do any kind of disk cleanup/maintenance/repairs, from a software perspective. That certainly does not bold well for performance. And, a number folks just upgrade "in place" to a newer Mac OS, when a clean, fresh installation of the new OS would be the preferred way to go.
 
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I also have an early 2008 iMac with 4gigs ram running 10.8.5. My machine runs excellent, almost no issues. !0.8 is the perfect OS for this iMac. Since my iMac is my only piece of Apple gear, I don't require the seamless integration with an iPad or iPhone (I have no smartphone, my tablet is a Blackberry Playbook), I have no interest in getting into the Apple Eco-System trap. I won't go to El Capitan because I know my machine cannot run it even though the specs say it can. I say that if it's working leave it.
 
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I also have an early 2008 iMac with 4gigs ram running 10.8.5. My machine runs excellent, almost no issues. !0.8 is the perfect OS for this iMac. Since my iMac is my only piece of Apple gear, I don't require the seamless integration with an iPad or iPhone (I have no smartphone, my tablet is a Blackberry Playbook), I have no interest in getting into the Apple Eco-System trap. I won't go to El Capitan because I know my machine cannot run it even though the specs say it can. I say that if it's working leave it.

But the op needs to have the fan repaired/replaced.
 
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I also have an early 2008 iMac with 4gigs ram running 10.8.5. My machine runs excellent, almost no issues. !0.8 is the perfect OS for this iMac. Since my iMac is my only piece of Apple gear, I don't require the seamless integration with an iPad or iPhone (I have no smartphone, my tablet is a Blackberry Playbook), I have no interest in getting into the Apple Eco-System trap. I won't go to El Capitan because I know my machine cannot run it even though the specs say it can. I say that if it's working leave it.
 
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I added a 4gb chip to my early 2008 MacBook Pro to bring it to 6 GB and it made El Capitan usable. Very useful $95 addition. I got my chip from Other World Computing and there are probably others. Two things to note: pay no attention to the side the label is on. My chip was made to go in label side down. (I had to ask.) Also, three sub-miniature Phillips head machine screws have to come out and go in. MUCH easier if you first dip the screw driver in Vaseline.
 
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I had the same problem with my iMac 2009 early model. The computer was painfully slow and too hot. It turned out that it needed to be vacuumed out. Speed is normal now and the heat has gone down to a reasonable level. The guy at the mac shop said it was very dirty/dusty inside.
 

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