IMac 24'' (2007) EMC 2134 - Crashing / HDD Failure?

I Recently started havning problems with my IMac, Crashing / showing crazy pixel lines in random places each time.
Now the login Username box only shows 5 white pixels but i can see the password box and background. Is this a sign of hardware failure?
Test i have done:
Upgraded to Mountain Lion
Booted in Normal mode, worked ok for 20 mins
Booted in safe mode
Disk repair utility / Ran with no issues
Booted in terminal and /sbin/fsck 
  *at first i got one item missing but now
  ** The volume (name_of_volume) appears to be OK
Restarted Pixel username box, mouse working, but everything frozen
Restarted 3/4 times same issue
and of course when i have loads to do
Any Ideas, i was looking at upgrading the HDD to a SSD but if it is not the issue i dont want to waste money.

In ireland we only have reseller Apple stores, and this Imac was purchased online,
is it possible to bring it to a Apple reseller store for repair?

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