iMac crashes after adding extra memory, any idea why?

Thank you for providing the updated information - however, as I suspected, that is one of the few iMacs from that period that cannot take more than 16GB RAM.

I'm struggling to find data on whether it can specifically use 2x 8GB RAM sticks, though your own experiments would seem to say it cannot & that its maximum configuration would be 4x 4GB sticks.

Info source : Everymac - Aluminum iMac Q&A

Extract

† Specifically note that the 21.5" models from the Mid-2010 line (iMac11,2) and the entry-level 27-Inch model -- the iMac "Core i3" 3.2 27-Inch (Mid-2010) -- only support 16 GB of RAM whereas all models from the Mid-2011 line -- 21.5" and 27" -- actually support 32 GB of RAM. If you have a 21.5" model (or the entry-level 27-Inch "Core i3" powered Mid-2010 iMac), please be very certain to identify it precisely to avoid potential disappointment when upgrading the RAM. The 21.5" Mid-2010 models use the 2389 EMC number whereas the 21.5" Mid-2011 models use 2428.

As you are still running Snow Leopard - there is a possibility that the 8GB stick might work if you install the 64-bit firmware update [which so far I'm not able to track down, but you should check Apple Menu > Software Update, just in case]

I'd like to post an update: I have purchased two Corsair 4GB ram sticks. They work perfectly and passed the memory test. It is indeed a memory compatibility issue - My 27" Imac doesn't take 8GB ram sticks!

Thank you all for your help!