Only boots to blue screen

Having read through some of the questions here, I think I have a slight variation.

When I boot my 17” MacBook Pro A1151 Snow Leopard 10.6.8, I get;

• SuperDrive clicks and whirrs
• Internal Fan starts
• Boot chime sounds
• Grey screen with dark grey apple logo and spinning ‘clock’

After about a minute it changes to a blue screen and the black cursor arrow momentarily appears in the top left of the screen.

I then get caught in a loop where it goes;

• Bright blue screen
• Dim blue screen
• Spinning black ‘clock’ at bottom of dim blue screen
• …repeat (every 10 seconds)

I have left this run for 20 minutes and initially the hard disk is very active. However, this activity eventually stops but the blue screen loop keeps happening.

This Mac is dual boot and I can boot to Windows (XP!) ok and I can also boot to OSX install DVD and run Disk Utility and repair both the disk (Appears OK) and repair the permissions (various permission errors, which it says it has fixed)

It looks like I am so close but still cannot fully boot. Any help would be greatly appreciated!