IPhone 4S Problem - When I enter Camera Mode, feint purple lines begin converging into my photo and LED won't turn on, only during videos! Please Help?

Hello Guys,
I am in need of dire assistance! Bought a new iPhone 4S 64GB Black through my Carrier, Optus in Australia.
Everything seems to be working perfectly, besides my camera. When i enter it, a feint purple begins to appear with my photos, and the LED flashlight wont appear when i take photos with front camera, it will only turn on when i activate an LED flashlight app and when i turn on flash when i record videos!
Does anyone else have this issue? If so, can someone tell me if its a hardware issue and needs to be replaced, or it can be updated and fixed with a software update?
Thank You!

I believe your only option is making an appointment at an Apple store if there is one nearby where it can be determined if your iPhone can be restored with iTunes there.
If not, more than likely there is a hardware problem with no way to know what the problem is without being diagnostically tested.
Apple doesn't offer a menu of repair services for the iPhone except for replacing the battery for an iPhone that is no longer under warranty. Apple offers an out of warranty or not covered under the warranty "repair" price, which pays for an exchange at a discounted price off the full retail sales price ($199 plus tax) which doesn't require signing a new two year contract with AT&T.

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