Problems after changing iMac Hard Drive

I changed the internal hard drive on my 2008 iMac and after replacing I

attempted to install Mac os lion on it and it is not allowing me in any way. I

try restarting while holding the c key to boot from CD or restarting while

holding the option key and when I do this I can scroll with the mouse but it is

an empty gray screen with nothing to boot up from. If I turn it on and let it go

it goes to a black screen saying no bootable device insert boot disk and press

any key but I am trying to boot from the CD .

All help would be appreciated