iMac Display Becomes Pixelated, Computer May Be Frozen?

So recently my computer screen will, after several seconds of being on, become pixelated. I can't tell if the computer is frozen when this happens. At first the display would freeze after a few minutes, but I had to keep turning my computer on and then off so I could save some of my files in case I had to reformat the hard drive. Is there anything I can do to repair my computer, or is this a hard drive problem? If it is a hard drive problem, will reformatting help? Any information on this would be great.
Other information:
I've looked at several threads on multiple forums and I've found nothing like this. A couple of places described something similar to this but there were no pictures.
Before the display went glitchy I noticed that my monitor was flickering a lot but I didn't know if that was normal and I was just seeing the standard refresh rate or if it was an indicator of a larger problem.

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Clarification Request
Which generation iMac?

The early intel iMac's do have major problems with heat and the graphics chip/card. There is a whole post of this in along with a few screen shots. If you have a early intel iMac, it seems to affect ALL of this generation not just the 24" versions. There is some tips on fixes and work rounds depending on the size of your iMac and how 'happy' you are with the workings on the internals of your iMac.

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I think I would go with a defective graphics card

on this problem.

If it is, then you are looking at $300 to $400 for a repair.

Take it to your local Apple Authorized Service Provider and see what they have to say.
Avoid the Apple Store, if you have one near, for the time being


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