"Apple Engineer visited yesterday and told me it was dirt under the Glass initially, which I knew it wasn't as I had already removed the glass and cleaned it.
The Engineer removed the glass, and then said OOO, seems like we have a hardware problem."
Obviously, part of the problem _is_ "hardware", but the REAL "problem" with the current iMacs is one of _design_.
That is, they've taken a component (LCD display panel) that is very susceptible to damage from heat and dust, and squeezed it into close proximity with a power supply -- which normally produces a lot of heat (and some dust with fan movement).
The end result is that over time, there is a good possibility that the portion of the display panel closest to heat sources, is going to exhibit some effects from that problem.
Thus, the cloudiness and "smokey spots" on the display panel.
You can replace the clouded panel with a "fresh one", but you still have NOT fixed the fundamental cause of the problem. And this is why even "replaced panels" start to cloud up again. Too much heat immediately behind them.
The only true "fix" will lie in a re-design that REMOVES THE HEAT SOURCES from behind the panels.
My "solution" would be an external power supply that could sit on the floor, thus re-locating much of the heat production OUT OF the iMac case. Of course, this runs anathema to Apple's "elegant design" paradigm -- even if the paradigm favors stylish design over long-term reliability.
I have a white Intel iMac that, so far, seems to be OK, but perhaps the design of these older enclosures dealt with heat dispersion a little better.
When it's time to replace this 8-year-old g4/MDD, I think I'll take a really close look at the Mac Mini (perhaps wait for the release of the next version)....