It sounds like this iMac may have a hardware issue. It seems you may have discovered one when you were changing memory sticks around. Is the one memory stick definitely bad....that is will it cause problems whenever it is installed by itself in any of the slots? If not, then it indicates a memory slot issue or perhaps worse.....a bus or CPU issue (aka Logic Board failure).
It would not surprise me if the Power Supply is bad. That was a very common problem back in the day....usually with swollen and/or leaving capacitor.
If the original Hard Drive is still installed, then that is another possible item which could be causing problems which can prevent booting completely (even the blinking folder with question mark).
You need to learn how to troubleshoot & repair hardware issues. The Apple forum is not the ideal place for such a discussion especially if you have no hardware troubleshooting background (you seem to have a little with that memory swap, but not enough to search further). There are other sites where there is actual hardware troubleshooting assistance, documentation, & information, including the Apple Service Guide for that iMac. Unfortunately the forum moderators will remove any links to such sites.
FYI, whenever you buy used equipment, you are always buying someone else's problem.
Power Supply & internal Hard Drive are the two most common failures on the 2007-2009 iMacs. Memory failures are also possible, but memory compatibility issues are an issue if third party memory has been installed since Macs are very particular about the memory they use. Memory from OWC is best these days, although memory from Crucial was fine if it was marked "For Mac" or "Mac Compatible".....anything else from Crucial was likely to cause problems.
Good luck.
