I'm hoping that this is just a bad video card but I wanted to post it up and see if anyone has an opinion as to what might be wrong with this iMac (2nd Gen right before iSight was installed - G5, running OS 10.5.7) based on what you see here:
My screen looks like this every morning when I boot up and by the 3rd boot I'm up and running. It's really strange. If you find out what's wrong please come back and lets us know! I'm interested in knowing if it's the video card.