Grey screen, what now?

Question

Loaded Lord of the Rings Online (LOTR) which included something called Pando Media Booster.
When I ran it the first (and only time) it worked beautifully. Amazing... for about 2 minutes, then the screen sort of flashed and became a rainbow-type digital pattern and I could not even get out of the program so had to turn off Mac by holding down on button in back.
When I restarted it got to the grey screen with Apple and then stalled there.
I tried zapping PRAM. I did a safe reboot and ran repair disk and repair permissions. I unplugged comp and tried it all again. Under safe reboot I deleted LOTR and Pando and Chrome (only because I had recently installed it). I reinstalled Mountain Lion.
After safe reboot (which is the only way I can access it)...everything seems ok unless I run something graphical. I ran a video and it was flashy, jerky, wavy (forgive my non-techy language). When I tried to access Launchpad the graphic icons were all weird and scrolled jerkily, then got stuck.
I now remember that I had some odd jerky things prior to this where my cursor hit links, etc. in some programs, so probably the graphics card was on its way out (also lots of fan noise/grinding when I was on a heavily graphic page). Is that probably what happened?
What should my next steps be? Anything else I should try? I've been told I should do a clean install. If that is the case will my itunes music be preserved without my backing up (I have itunes match)? Would I do install with orig. disks even though they were from a few years/OSX's ago? (Current OSX was downloaded, installed via app store). What else should I back up and can I drag all this to a USB flash drive?

Answer 1

Please read this whole message before doing anything.
This procedure is a diagnostic test. It won’t solve your problem. Don’t be disappointed when you find that nothing has changed after you complete it.
Third-party system modifications are a common cause of usability problems. By a “system modification,” I mean software that affects the operation of other software — potentially for the worse. The following procedure will help identify which such modifications you've installed. Don’t be alarmed by the complexity of these instructions — they’re easy to carry out and won’t change anything on your Mac.  
These steps are to be taken while booted in safe mode.
Below are instructions to enter some UNIX shell commands. The commands are harmless, but they must be entered exactly as given in order to work. If you have doubts about the safety of the procedure suggested here, search this site for other discussions in which it’s been followed without any report of ill effects. 
Some of the commands will line-wrap or scroll in your browser, but each one is really just a single line, all of which must be selected. You can accomplish this easily by triple-clicking anywhere in the line. The whole line will highlight, and you can then copy it. The headings “Step 1” and so on are not part of the commands. 
Note: If you have more than one user account, Step 2 must be taken as an administrator. Ordinarily that would be the user created automatically when you booted the system for the first time. The other steps should be taken as the user who has the problem, if different. Most personal Macs have only one user, and in that case this paragraph doesn’t apply. 
Launch the Terminal application in any of the following ways: 
☞ Enter the first few letters of its name into a Spotlight search. Select it in the results (it should be at the top.) 
☞ In the Finder, select Go ▹ Utilities from the menu bar, or press the key combination shift-command-U. The application is in the folder that opens. 
☞ Open LaunchPad. Click Utilities, then Terminal in the icon grid. 
When you launch Terminal, a text window will open with a line already in it, ending either in a dollar sign (“$”) or a percent sign (“%”). If you get the percent sign, enter “sh” and press return. You should then get a new line ending in a dollar sign. 
Step 1 
Triple-click the line of text below to select it:
for k in /Sy*/L*/Ex*/{,.?}*.kext; do test -f "$k/Contents/Info.plist" && /usr/libexec/PlistBuddy -c "Print :CFBundleIdentifier" "$_" | egrep -qv "apple|Accusys|ArcMSR|ATTO|CalDigit|HighPoint|hp-fax|JMicron|print|SoftRAID|stex" && echo $k; done | open -f -a TextEdit
Copy the selected text to the Clipboard by pressing the key combination command-C. Then click anywhere in the Terminal window and paste (command-V). A TextEdit window will open with the output of the command. Post the contents of that window, if any — the text, please, not a screenshot. You can then close the TextEdit window. No typing is involved in this step.
Step 2 
Repeat with this line:
ls -1A /e*/mach* {,/}L*/{Ad,Compon,Ex,Fram,In,Keyb,La,Mail/Bu,P*P,Priv,Qu,Scripti,Servi,Spo,Sta}* L*/Fonts 2> /dev/null | open -f -a TextEdit
Important: If you formerly synchronized with a MobileMe account, your me.com email address may appear in the output of the above command. If so, anonymize it before posting. 
Step 3
osascript -e 'tell application "System Events" to get name of every login item' 2> /dev/null | open -f -a TextEdit 
Remember, steps 1-3 are all copy-and-paste — no typing. Also remember to post the output. 
You can then quit Terminal.