Screen Glitch - no start up - imac - intel - 10.7.3

Processor  3.06 GHz Intel Core 2 Duo
Memory  4 GB 800 MHz DDR2 SDRAM
Graphics  NVIDIA GeForce 8800 GS 512 MB
Serial Number  74******3F9
Software  Mac OS X Lion 10.7.3 (11D50b)
Hello,
several months ago my imac overheated and the screen started to flicker. It was not a particularly hot day but two or three weeks previously the computer had been transported by car for a few hours - it was wrapped up in a blanket. It had been working fine for the few weeks between the move and the overheating.
I have only now got round to dealing with it.
The machine will not start up. There is a repeated pattern covering the entire screen that looks like little bats - yes, bats, flying bats, they are small and yellow. It goes to the grey apple icon and a grey dial spins for a while and then stops spinning and then sometimes the screen goes to a bacl and white flickering mode where the bottom three quarters of the screen are black and the upper part is white and it flickers up and down a bit.
I can boot into safe mode but the screen problem still occurs. I have put a video of this on youtube here.
I have tried booting from a disk warrior disk but it does not go anywhere - the machine crashes. I am unsure exactly what the problem is, whether it is hardware or software. I got it to boot up once - not fully, but to a dialog box that said something about the computer crashing and when I clicked okay it went to the black and white flickering screen. But when the diealog box was open there was no problem with the screen - or at least I could not see one - the background was entirely blue with only a small dialog box in the middle.
If anyone has any suggestions I would be very grateful. Also, if there is any other information that you might need then please ask.
Thank you for your help in advance.
Adam.
<Edited By Host>

First, which iMac? Second, contact Apple Service, iMac Service or Apple's Express Lane. Do note that if you have AppleCare's protection plan and you're within 50 miles (80 KM) of an Apple repair station, you're eligible for onsite repair since yours is a desktop machine.  Might also apply to new machines the first 90 days. BTW, the AppleCare Protection Plan's the best insurance policy available for desktop machines. Get it if you don't have it before contacting Apple.

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