This may be late, but YES. The answer is YES. YES you can convert your old iMac (or laptop or anything!) to a standalone monitor. I did this sucessfully with both an old 17" Powerbook screen, and an old 2007 24" iMac.
1) Gut the iMac completely. Remove all components from the shell
2) Install a VGA Control Board. Based on the model number you provided, this would be your best bet:
3) recycle screws and screw posts from the old guts to secure the VGA control board. You can also use plumber's tape+bolts, or just hot glue and duct tape.
4) The power supply. Most VGA control boards take the standard 12V that eeeevvvveeerrrryyything uses (usually 5.5x2.1 plugs). So find any old wall-wart or power supply you have lying around, just make sure your 12v psu has sufficient amperage. I placed the PSU inside the iMac case, and soldered the power plug to the inside of the iMacs power port, so that I can use the original white power cable to power the iMac. If you are concerned about heat, you can either: (a) splice into that soldered joint (pre-psu) and add a 120V-to-USB adapter and a 5V fan or two, or (b) splice into the post-psu 12v side and add a 12v computer fan.
5) the VGA Control Board's Menu Button Board: fastened this to the bottom of the iMac case (using bolts, nuts, and metal plumber's tape) pointing downward out of the uncovered RAM bay. You can't see them unless you tilt the iMac up, it's nice.
6) the Video-In. This was the only imperfect bit. My VGA control board for my 24" iMac used VGA+DVI+HDMI. I bought an HDMI adapter that is normally used for running HDMI through conduit and installing in-wall jacks. It is a couple inches long, female on both ends, and one end has extra screw posts where you can screw it to the back of a Decora plate. You can find similar ones for DVI and VGA. Google is your friend. I dremmeled a hole in the back of the iMac, stuck the HDMI over it, then bolted it on with nuts and bolts. I used a very short HDMI cable from newegg to connect it to the VGA controller.
From there, it was a simple reassembly. It looks just like an iMac, except if you look on the back or bottom there's a random hdmi port and extra buttons. It's also significantly lighter. I have a hackintosh PC built into an old metal G5 case. It is satisfying using the 24" iMac with the hackintosh, running modern games on Win7.
Anyways, I hope this helps you and anyone else who reads this. The key to converting old screens is to find the make and model number, then google that plus the words 'VGA control board' and you'll find that you need. I got mine both times, from eBay. Goodwill is a great place to get cheap working 12v power supplies. Look for at a 12v power brick with at least 3A and you should be good.
EDIT FEB 11 2015:
To anyone wondering what VGA control board to get:
**Apple does not manufacture its own screens.**
Apple uses many different make/model screens across products or within the same product: Say for example, Apple sells a million units of a particular model of iMac. Chances are, the screens are NOT going to be all the same Make&Model. Apple may have took 200,000 screens from one source, 500,000 screens form another source, 300,000 from another source to make that million units. Thus, it is not practicable for you to post your hardware identifiers on the internet and ask me what VGA board to get.
Here is the only way to be sure:
1) Take apart your iMac.
2) look on the back of your iMac's LCD panel for the manufacturer's sticker listing the model #, S/N, etc.
3) Google/eBay search for "your-screens-model-number VGA Control Board".
No one is going to hold your hand or do it for you. If you want to hack your screen from your old iMac into a working monitor, roll up your sleeves and prepare to get dirty.
EDIT MAY 2015:
I am now working on an iFixit guide for doing this to an iMac. Stay tuned.
Edit December 2017:
Nevermind, I never got around to finishing that guide, and iFixit deleted the W.I.P. guide. So nvm, not gonna happen. But tbh this text post should have enough information for you to Do It Yourself, you just have to want it. Want it bad enough to try something scary and new. You can do it. I believe in you :)
Edit June 2019:
Here. I made a little “How To Buy The Correct Video Control Board" guide.
Sheesh. This comment from 5 years ago just won’t die. I keep getting PMs, emails and even the occasional phone call to my business about it. I hope that guide serves as a good starting place. This was a fun little DIY project I did many years ago. Maybe you can enjoy doing it yourself, too.
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