Same thing happened to my Dad's iPad 2 about 3 months ago, it fell of a table and the screen wasn't cracked, but the LCD showed the same lines as yours and the colors were all messed up. Took the iPad to the Apple Store and they wanted to charge $249. for a replacement since it was out of warranty.
Before replacing the iPad, we decided to go home and do a backup. Searched in google about the problem and found a thread on a different forum with somebody having the same problem. He recommended to hit the back of your iPad with your hand, palm open several times. Believe or not, after tapping the iPad several times, each a little bit stronger than the last, the screen went back to normal and my Dad's still using his iPad with no problems.
Try it before taking the iPad to the Apple Store.