small wavy lines on early 2008 iMac screen

Hello, I have an interesting problem, and I am trying to figure out if it is a graphics card issue, or a display issue. There are random wavy lines on the screen in blue and yellow. The lines seem to move and appear with different windows open and follow the windows around, so it doesn't appear to be a display issue. Has anyone else had problems like this?? And how would I go about fixing it, do I need to buy a new graphics card, or should I start somewhere else. Here are my specs, and a screenshot of the problem.

24" Early 2008 iMac
3.06 GHz Intel Core 2 Duo
4 GB 800 MHz DDR2 SDRAM
NVIDIA GeForce 8800 GS 512 MB
Mac OS X Lion 10.7

Thanks!

Do you have a spare monitor that you can attach to the iMac? You can also use a TV. Check the display of the spare monitor, if it has the same problem, it's likely being caused by graphics. You can not swap out the graphics card as it's surface mounted to the logic board. The entire logic board would have to be changed out.

okay, I hooked up my HDTV as a secondary screen with my handy mini DVI to HDMI dongle, and I fiddled with dual displays and just mirroring the screens, but either way I could not get any squiggly lines or any other sign of a faulty screen to show up at all on either screen!! As soon as I unplug the secondary display though, the lines come back. They start on just one window and they increase the more work I do, and the more windows open. I have also noticed they are red as well as blue and yellow, which makes since that they hit all the RGB colors not just two of them. If you have any other suggestions that would be great! I also ran Apple Hardware Test with extended testing and it came up clean.