Chosen Solution

My iMac start showing black squares on its screen and then had distorted pixels on the display. It eventually got to the point where it will attempt to start up (bongs, shows apple icon and progress bar, but then goes to restarting in a continuous cycle. The start up screen is sharp and clear; it just can’t complete start up. I opened the computer up to see what the diagnostic LED’s said. The four LED’s are all lit up when the computer is plugged in and attempting to start up. LED’s 3 and 4 go off when the computer restarts. I first thought the video card was bad but LED 3 is on, indicating that the computer and video card are working properly. Any ideas on what might be wrong?

Unplug the LCD cable and plug it into a moniter. If it has the same screen issues, then it might be the GPU