iPod touch Temporary horizontal lines when waking up

I'm trying to diagnose a problem on an 3rd gen iPod Touch. When waking it up, from the home or sleep button, the screen has a flash of whitish horizontal lines that overlay the lock screen. The odd thing is they seem to be more bold when waking only a few seconds from sleep. There is a gradual lessening from 1, 2, 3, 4 and 5 seconds. At 5 seconds they aren't actually perceptible. Resetting, restoring, erasing and restoring don't have any impact. I am thinking it's the digitizer and it's just showing it's age. There is no quality issue with the screen during active usage. Any thoughts?

Well, my wife owned(s) it from day one. It's probably been dropped, but the glass isn't cracked and the shell isn't dinged, probably because she had a soft case on it. Definitely no water damage. I don't live near an Apple store, otherwise I'd just get their opinion. That's why I'm here. There are a few "iPhone Surgeon's" around here, but I'm not ready for throw the dice and see what they say. Most likely, "I can fix it for $100." It still works fine, but I had it listed on Amazon, until I noticed the quirk and removed it. Really just curious what's the cause of the quirk.