IMac 20" - Gradient on display

I have recently bought a second hand iMac - (20" 2.4Ghz Intel Core Duo - Aluminium).
All was great for the first day untill I did my first bit of design on it. The design had a thick red stripe at the top and bottom of the page. I was confused to see that the bottom stripe looked remarkably pink in comparison to the rich red at the top. I checked that both stripes had their colour generated from the same swatch (C0M100Y100K0), so both should be rich red hmmm... To investigate further I filled an entire canvas with one colour in photoshop and filled the screen. The results were a worrying gradient from a nice rich saturated colour at the top of the screen to a faded unsaturated whiter colour at the bottom (this happens when filled with any colour). I went on to re-calibrating the screen in expert mode several times, still the same.
Research on the internet showed many people complaining of exactly the same thing in forums throughout the internet with out of the box iMacs. I have yet to find a solution to the problem, so my questions are:
Is there a solution?
Is this a known, ackowledged problem by Apple?
And if I take it back to Apple can they fix it for me?
I am quite concerned about this as I am a freelance designer and money is very tight. I was expecting my investment to be a helpful step up from my now flagging G4. Instead I am worried I will be left with a computer that can not be fixed and will be impossible to design on.

Thank you for the info James. I gather from further reading and a big thread on this forum that this was the case. I'm pretty annoyed that such a product was released but I guess my fault for not doing enough research.
I'm thinking the easiest option is to run dual monitors from my Mac, I always have done from my G4 and found it useful. I guess this is possible since there seems to be a socket on the back of the mac with a monitor type icon. I'm not sure what cable I would need to get to do this though?
Are there any other issues I should think about in running duel monitors? Will it effect performance much?
Can anyone suggest any reasonably priced (under £200 is about my limit) CRT monitors that are good for design? Is this too little money to get anything decent?
Thanks for any help!

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