I checked some Olympus user forums and found nothing about LCD problems.
You tried the only two things you can control - Fresh batteries and different memory card.
If you see the bad image before you take the photo, the memory card is not involved at that time.
With the high prices for digital camera repairs, it may be time to shop for a replacement.
I have an Olympus D-380.Decent camera for the money we paid. It's a year and a half old, and just this past week the LCD has gone weird on it, the colors are run together and look 'drippy' when taking a picture, however, pictures that were taken previously and not yet downloaded show fine on the screen. Is this a problem with the screen itself,or with the memory card ( I put another card in that is rarely used, and still the same problem, also changed the batteries) Any thoughts on what the problem is, and what to do about it?