Graphic problems since 10.7.2 update on new mac mini. Is there a fix?

Updated to 10.7.2 on 2011 Mac Mini. 2.3 GHz Intel Core i5. 8GB Ram. Old 23" cinema display using hdmi adapter, usb relay not plugged in for use of usb ports on display.
Ever since update, response of apps is really slow and i get a lot of graphical errors (screen junk) at certain times. There really seems to be no rhyme or reason to it. It does seem worse in safari though. It also happens to the items in the doc and puts weird boxes behing the icons, etc. I attached a screenshot of a representation of what is happening graphically.
Not sure if anyone else has had this problem or if there is a fix that anyone has found.
Thanks in advance.

Went through a complete archive and reinstall and did everything that applecare has told me to do with out any luck.
Mac Mini is currently at the authorized repair shop, but it's frustrating because their diagnostic tests are showing that the graphics card is fine. I brought in my 23" cinema display for them to connect it to it to see if that may be the problem when it's connected.
Any one else have an original 23" apple cinema display hooked up to their 2011 mac mini and experiencing any problems? It worked flawlessly with this display up until the 10.7.2 update.

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