T500 Graphic Issue (atikmdag.sys)

Question

Hi, I want to mention I've already went ahead and tried every other possible solution suggested on the web before coming here, but either I am still doing something wrong, or I have to assume my ATI just died... I don't have much experience with computer hardware, so I am really hoping I'm mistaken. Hopefully someone can help me out with this.
The situation:
My T500 Laptop (Win7, 64bit) with switchable graphics suddenly crashed while I was playing a game. The screen froze and the graphics warped/fragmented and I had to force a Reset because nothing happend anymore.
And ever since then I am not able to start up Win7 with my ATI Radeon Mobility HD 3650. I always receive the BSOD (Bluescreen) with the error message that atikmdag.sys caused a critical error and the system shuts down.
Additionally, the Lenovo LCD is no longer showing anything at all, I am forced to use an external monitor to see something.
The start-up screens are all warped by graphical errors, and the only way to load windows using the ATI is to enter safemode. Then I have to uninstall every ATI-Driver if i want to enter Windows again outside safemode.
Next time I start windows, it installs a driver from its local library, and the whole desktop is overlaid with blue vertical lines.
I tried making a screenshot of them, but when I look at the screenshot with my working Intel Graphic card they are nowhere to be seen. Which kinda confuses me...
Using the BIOs to switch from Discrete (ATI) to Integrated (INTEL) graphic card allows me to use my Laptop as usual, with no problems or even hints at the errors the ATI causes. If I use the BIOs to set everything to switchable Graphics I receive the perm-black screen again, but this time even the external monitor is not showing anything.
What I tried to solve this problem:
-Checked for Updates and new drivers.
-Unistalled all installed Drivers and replaced them with the newest Drivers available
-Installed Win7 again, applied every Update, Patch and Driver available
After doing all this, the only thing left would be to assume that the ATI simply died after all the time I spent using her.
Using Google to search for an answer leads me to countless topics with "Use Update" as the answer. I am fairly convinced that the drivers are NOT the problem.
If I need to post anything else, or if the description of my problem is confusing, please tell me. I really hope there is another way to fix my Laptop except replacing it with a new model, so I will try to do anything I can to help find a solution.

Answer 1

This could be a hardware issue.  Since it happens as you start up I don't thik it is heat.  If under warranty, I would backup everything and send it in - you may end up with a new motherboard.  If not, a few thoughts.  Re-image your hard drive - back up everything then re-install windows from the bacup media that you made when you got the computer.  Otherwise, stick with slow old intel graphics and you will need to game on something else.
T61p, T400
formerly x23, x40