Well folks I officially proved it is not any 3rd party extention, and am at the end of a rope here.
After crashes sometimes twice daily, I went and bought a new external hard drive. Formatted and installed a fresh copy of Mavericks, did not resore any information or move any data over. Just minutes after the fresh system install booted, the pink squares appeared!
Of course I've learned to deal with the video issues, but after letting it sit for about an hour doing nothing, again still on its first boot from a fresh install, I sat down, opened system preferences, and it froze solid.
I'm convinved after everyone's information here that some video driver update that apple adopted and integrated several system version back is the culprit. I have NO idea what to do next, the only solution I see is reverting to a fresh install of 10.6 or 10.7 and not ever installing an update. That's certainly not acceptible for a computer that in my mind is still relatively new (Again, I have a Mid-2010 27" iMac with quad 2.8 i5). My computer is fast becoming a brick. I can't even sell it knowing that a fresh install will immediately have issues!