Chosen Solution
This beautiful Intel based iMac 20” early 2009 at startup jumps to a blue screen with a lot of visual noise (just for a second) and then turns black and stays black. I’ve checked the screen for image with a flashlight, no signs of a faint image. I’ve disconnected all LCD cables (except for the temperature otherwise fans go crazy), hooked up an external screen through DP and the DELL external screen shows perfectly clear image. The diagnostic LEDs are burning as follows: 1: green 2: green 3: off 4: green. Inverter or screen, what do you think? EDIT: upon closer look I find that LED 3 isn’t off but is actually missing! I believe this is the GPU indicator (someone confirm?) and since external screen shows image I believe it works.
With no image that tells us the display its self has failed. On the backside under the covers is another board called a T-CON. In your case this is the part that has failed. Sadly there part is not readily available, you’ll need to replace the full display. 20” Display Assembly - Apple P/N 661-4983