IMac 21.5" boots to white screen with vertical blue lines/bars then locks up

iMac 21.5" (mid 2010) Intel Core i3 4GB RAM with Radeon HD 4670 boots to white screen with vertical blue lines/bars:
Then it locks up after a few minutes, at which point the screen changes to white with these blue symbol things all over the screen:
If boot to Safe Mode, it still has the white screen with blue lines/bars, but eventually loads the login screen and I can successfully login and get to the desktop, but even that has the bars/lines.
Eventually, after enough restarts or hard shutdowns it will boot normally with no video/display issues. I've run disk checks, did the SMC and PRAM resets, checked logs (that I know of), and have even taken it completely apart, cleaned it out, reseated everything, put it all back together, but no change. I've read a few other posts about similar issues (but not quite the same video issue as this) where people had the logic boars replaced or reinstalled OSX, but that didn't always fix it. Any ideas? Has anyone seen this issue before? Thank you.

crw4096 wrote:
Is this a dead disk?
Very well could be.
If you can not startup from the Hardware Test, in Safe Mode or from > OS X Recovery  as discribed in the Support article's.
Dig out the original Install Disc set that came with the iMac and do one of the following.
1. Attempt to Repair the Hard Drive.
Start from your Mac OS X Install disc: Insert the installation disc, then restart the computer while holding the C key.
When your computer finishes starting up from the disc, choose Disk Utility from the Installer menu. (In Mac OS X 10.4 or later, you must select your language first.)
Important: Do not click Continue in the first screen of the Installer. If you do, you must restart from the disc again to access Disk Utility.
Click the First Aid tab.
Click the disclosure triangle to the left of the hard drive icon to display the names of your hard disk volumes and partitions.
Select your Mac OS X volume.
Click Repair. Disk Utility checks and repairs the disk.
2. Run the Hardware Test from the second Install Disc.
    1. Insert Disc 2 and Startup holding the D key.
    2. Select the Extended Hardware Test.
Then if you still can not get anything going, you need to contact your Local Apple Store or AASP and make a Service appointment.
see > Apple - Find Locations

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              Google Earth Web Plug-in: Version: 7.1 Support
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              1.12 GB          Inactive RAM
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