I'm going to assume the system is out of warranty given it was dropped. So, some of this depends on what you can tell me about the model. Like is it a Mid-2010, Late 2009, etc.
And it's really a bit early to say, but I happen to know someone who has a system with a very similar sort of graphical issue. After replacing the logic board and having the same problem with the new one, and trying just about everything else possible, came to the conclusion that somehow or another the heatsink must be bad.
If the system was dropped, it's not inconceivable that the heatsink got knocked loose a little. Maybe it's taken this long for the thermal grease to dry out enough to start causing problems. So reapplying the thermal grease may not be a terrible idea, or at least checking that the screws are on tight.
User surfing web when the screen developed a problem.
Shut down the machine and rebooted.
Screen has the problem immediately, as soon it becomes illuminated.
http://www.flickr.com/photos/8777887@N02/4979435093/ is where you can see an image of the screen
2GB Ram. Swapped for known good during testing.
Will not boot from HD, optical drive or external Firewire.
Normal Apple logo and spinning gear for about 45 seconds and then Kernal Panic.
All screen connections are good. No visible physical damage to LCD.
Machine was dropped a couple of months ago, resulting in some case damage, but it performed normally up until 3 days ago.