iMac display problems

I own a 20 inch, white, 2.16GHz Intel Core 2 Duo iMac. Lately I have been noticing that sudden on screen movements such as activating the dashboard and using expose have caused my display to power down and not turn back on, or freeze the entire computer. I also noticed small distortions on screen ocasionally and pixel thin lines of discoloration on the desktop backgrounds. I thought this was a hardware problem so I did a restore to factory OS, but after using the clean system the same problems happened. I now think this may be a hardware problem but I have no idea what. I ran apple hardware test and it came back clean. Is there any software I can use to fix this, or do I have to send it in for repair?

Sounds like the graphics card may be at fault. Might be a good idea to give Apple support a call and schedule a time where you can take it on in to have the card replaced if need be. Assuming of course your machine is still under warranty.

Regards.