Unexplainable pixilating of the screen HELP

We've had an iMac since 2008/2009 and yesterday the screen started to pixelate. We've got no explanation for why. My mum used it about an hour before it happened and it was running as normal, an hour later my brother went to use it and the screen was pixelated. The pixelation happens in random areas across the screen and makes the iMac impossible to use.
We turned it off using the power buttom and unplugged it - it was left like this over night. We've plugged it back in today and now all we're getting is a pixelated blue screen. It's not even loading the screen that allows us to log in.
It hasn't been bumped or anything like that. It's definitely well used and I know it's getting older - any ideas of what's wrong and what we can do to fix it (or any idea of what it'll cost to fix if we take it in to apple)?
Just to add - we've got no idea what operating system it's on. (Its whatever it was on when we bought it). My dad's forgotten and I was too young to care when we first got it!
Here's a few pictures:
The blue screen we've got currently.
One of the pixels. We've got these in random places across the screen. There's less now on the blue screen than there was before we turned it off on the desktop.
Thank you.

The graphics card may need replacing.
I'd suggest running the Apple Hardware Test but that requires knowing which OS X iinstalled >  Using Apple Hardware Test
Take your Mac in for service >  Apple - Find Locations
You could try a PRAM reset >  Resetting the PRAM

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