IMac 27 - Pixel Distortions

Hello community,
I hope someone can help me out with my bad situation. Since I bought an iMac in April 2010 - I really had NO problems and was so happy with the product.
Last week unfortunately a strange error happend SUDDENLY.
After I turned on the iMac, approx. after 30 mins of running a pixel error, distortion are seen on my screen. (Please see attached images).
I tried out a lot now and I still have these annoying error which I can't get rid of. Working, surfing on the iMac ist not really "possible" anymore.
My System:
iMac Intel Core i5 27 inch
Snow Leopard 10.6.8
CPU 2.66 GHz
Memory 4 GB
HD 1 TB
Graphics Card ATI Radeon HD 4850 / VRAM 512 MB
Unfortunately I have no Apple Care anymore.
What I've done so far:
- Restarted several times (still getting the errors)
- Unplugged it two days from power ressource (still getting the errors)
- Reset of PRAM and VRAM (still getting the errors)
- Installed all Updates (still getting the errors)
- Repaired Rights of the Harddrive (still getting the errors)
- Apple Hardware Test (no Hardware errors detected, but still getting the pixel errors
- Formated my Hardrive and installed Sow Leopard from the OSX-Installation Disk (still getting the errors) (also after updating all files through Software Update)
- Reset of Chaches....
BUT starting the iMac in SAFE MODE - the pixel errors are GONE.
What's the problem, can anybody help me out? I guess updating to 10.7 (Lion) won't be the solution. That would be too easy.
Thanks in advice and looking forward to your answers.
Regards from the alps
Stefan

That sounds like an over heating graphics chip, because it seems to starts after around 30 mins.
Get the iStat Pro widget to monitor and record your iMac's internal sensors, (GPU is for the Graphics Chip) and take some readings every 5 mins or so during that fisrt 30 mins.
iStat Pro, a Dashboard Widget by iSlayer
When was the last time you cleaned the iMac's bottom Air Intakes?
1. Shutdown the iMac
2. Un-hook everything, power & all other devices
3. Gently lay the iMac face down on a soft cloth or towel.
4. Go get out the vacuum cleaner, hose and brush attachment.
5. Seriously vacuum out the iMac's botton grill work and vents on the back.
(including under the RAM cover if your incline)
Now then, take and record some temperature readings?
Unfortunately if the problem persists, then you will need to take the iMac in for service.
Apple - Support - iMac - Service FAQ

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