Hi,

Sounds like the graphics card has failed or hardware issue.

Apple has an extended warranty fix certain S/N.

http://www.apple.com/support/imac/re...ensionprogram/

You could try running the hardware diagnostics on the mac boot dvd. Put the dvd in, boot while
holding down the "d" key.

This forum at apple support has suggested trying a graphics debug utility called quartz debug for similar issues when running 10.5.1

http://discussions.apple.com/thread....sageID=6968726

Quartz Debug would be locate at the root of your hard disk, at: Developer:Applicationserformance Tools.

If you do not have a "Developer" folder, that's because you haven't installed the optional XCode tools that came on your Leopard DVD (I think it's on the SECOND DVD).

Hope this helps...