I agree with everything you say there, it all sounds very logical and I agree that the OSX partition of the start-up disc is corrupt somehow.
I inherited the machine from a co-worker but as far as I am aware it has never been upgraded at all, and is very likely to be running as it arrived out of the box, so to speak.
In terms of how many RAM chips there are, I am afraid I don't know. As I'm sure you've already gathered, the inside workings are a bit of a mystery to me, but I'm willing to take a look if you are prepared to describe what I'm looking for (I bet you're wishing you never started helping me now?!?!)
If not, my husband is more clued up on what goes on inside the box (although only on PCs) so perhaps he can help me when he gets home if it is all impossible to explain here.