There are red lines in images iphone 4 ios 5

Ever since I upgraded my iPhone 4 to IOS 5, most images (in Safari, in Apps such as eBay and CraigsPro, thumbnails in Photo app) are corrupted in that they are pixelated and have red vertical lines running through them.  If I email photos that I take they are fine but if I SMS them or upload them via an app (such as photobucket), they are corrupted the same.  In the photo app, they are corrupted as thumbnails but fine if you open them individually. 
I tried a complete restore and I tried the fixes where you delete the /PhotoData/Photos.sqlite, /PhotoData/PhotosAux.sqlite, and /PhotoData/com.apple.photos.caches_metadata.plist files on the iPhone.  To no avail.  I am officially frustrated.  I'm guessing Apple support will charge an arm and a leg to even look at this.  Hopefully someone else has this problem and can chime in.
This is a screenshot from the phone to show what the corrupted images look like:

In case anyone stumbles across this, I finally took the phone into the Genius bar.  They replaced the phone as it was under warranty and they had no idea how to fix it.  Never did find out what might have been wrong.

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