Images distorted when editing in iphoto .... software or hardware?

I posted in an iphoto 5 forum post about this and wanted to check here to see if anyone has any ideas about it, as well.
here's that discussion:
http://discussions.apple.com/thread.jspa?threadID=1502109&tstart=0
I am getting these purplish lines/blotches in my images when I move the editing sliders in iphoto 5.
This is what the images look like before I edit (notice the faint geometric patterns throughout the entire image)
and this is what happens after
as is covered in the other thread I have rebuilt the library, repaired permissions, deleted preferences, tried creating a new account, and reinstalled iphoto 5 to no avail.
Here's the wildcard .... I recently had a logic board failure and it was replaced. This is actually the 3rd new board, the first two that they installed were defective(!) Could it be the logic board or video board causing this to happen? It only happens in iphoto and only when the edit sliders are moved.
Do you think that doing an archive and erase could fix this?
Does an archive and erase delete preferences/passwords/settings and the like?
Thanks in advance
Henry

To follow up, yesterday I phoned Apple Care and arranged to take my imac to the repair center.
That done, here is my issue, this will be logic board number 4 since mid March. Initially, I took the unit in and a board was ordered. That board was determined bad before I got the machine back and another board was ordered. That board was determined to be faulty, as well. A third board was installed and I got my imac back. Within a few days I noticed intermittent video patterning and random freezeups as described in this topic. I followed all of the suggestions that were given and determined another bad logic board.
This morning I called Customer Relations as has been suggested in many of the threads that I have researched here. The representative was very thorough and cordial, as well as understanding. He ultimately decided that since the machine worked well for 2+ years and only started malfunctioning 2 months ago, that I should take it in to Apple Service one more time for another logic board. It sort of made sense to me, but I was hoping that he would offer a replacement since this is logic board number 4 being replaced. (albeit in a short period of time) He did say that if this one went bad that they would probably relpace the machine (this was not overly reassuring to me)
Are my expectations too high or am I being unreasonable? Should I have been more insistent? Is his decision final, or can I call back and ask for an "appeal"?
Do I actually even have cause to ask for a replacement machine?
Thanks for putting up with my frustration.
Henry

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