It is definitely the logic board on the computer. Sorry man. It is the reason you are getting grey line on the apple logo and why you can't boot to an external drive, internal drive or a CD.
I am disappointed everyone jumped to conclusions about the hard drive when you clearly stated you were able to read the data off the drive. Also, it wouldn't be the RAM because you hear the BONG!!!! which means the computer has past POST. (power on self test).