Brand new iMac 27" i3 is flashing blue screen

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My brand new Imac (one-day old) is acting very odd as it slowly flashes a pulsating light blue screen when I try to access Apple Menu (restart/sleep/shutdown) features. No matter what I do it will not turn off. I have since had to do a hard shutdown but now it stops at an error screen upon start-up that tells me to restart!
I am Mac savvy and this has never happened to me. Prior to this happening, I called Apple Tech Support because I could not use their Mac Migration feature to move my info off of a G4 running 10.4.11. Tech support could not help either as wireless, ethernet and direct Firewire attempts yielded no Migration results. I finally had to pull the hard drive out of the G4 and hooked it up to the new iMac. Everything seemed to transfer except when it was done the contents of what I just copied thru Migration was nowhere to be found. That is when I started experiencing the slow-flash blue screen phenom and is where I am stuck today.
I am ready to take this thing back. In all my years I have never had a problem like this with an Apple product. Any help or insight will be appreciated.
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Replay

ONE
Paul has given you good advice in that I would reinstall the OS from the supplied disks to get your computer working properly.
TWO
Then re-install your old programs (only those you really need since they are likely PowerPC, not “universal” Intel programs) from their original disks.
THREE
If you have the user data from the old drive backed up, then hopefully you can restore your user data to the new drive or buy an enclosure and access the old data as needed (which is what I did when originally migrating from a Power Mac G5 to the iMac (late 2009).
Alternatively, if step ONE is problematic and your machine is defective, you can likely return it to Apple within 14 days (or whatever the law is in your country) for a replacement or refund and purchase a new iMac just released today.  Steps TWO and THREE still apply in this case.

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