Is my NVIDIA GeForce 8800 GS graphics card bad?

My 24" iMac has been exibiting strange behavior lately... It appears to be if a graphical nature where the screen will randomly flicker or go blank in a variety of colors (black or white or yellow or red or blue). Sometimes a preceeding indicator that this is going to occur is that the system becomes on responsive or extremely delayed, text and other graphics appear garbled/corrupted/scrambled.

I've used Mac Hardware Test, Disk Utility, TechTool Pro 6, anti virus software - even took it to a local authorized Mac repair shop (not Apple Store) and the results are the same - Everything LOOKS fine with no problems reported. I've reinstalled the OS and even gone as far as completely wiping the drive and starting from scratch, just incase it is/was some kind of odd software conflict. Yet, the problem persists and the Console always captures something like this just before another epic fail:

"

4/13/12 5:55:50.000 PM kernel: NVDA(OpenGL): Channel exception! exception type = 0x8 = Fifo: Watchdog Timeout Error

4/13/12 5:55:51.000 PM kernel: IOVendorGLContext::ReportGPURestart

4/13/12 5:55:51.000 PM kernel: 0000006e

4/13/12 5:55:51.000 PM kernel: 00000010 0000502d 00000472 00000000

4/13/12 5:55:51.000 PM kernel: 0000047a 0000022c 00000001 0000000f

4/13/12 5:55:51.000 PM kernel: 00000000 00000000 01fffe03

4/13/12 5:55:51.000 PM kernel: 00000000 00000000

4/13/12 5:55:51.830 PM sandboxd: ([1021]) DumpGPURestart(1021) deny file-write-create /Library/Application Support/SubmitDiagInfo

4/13/12 5:55:51.851 PM sandboxd: ([1021]) DumpGPURestart(1021) deny ipc-posix-shm apple.shm.notification_center

4/13/12 5:55:51.853 PM sandboxd: ([1021]) DumpGPURestart(1021) deny ipc-posix-shm apple.shm.notification_center

4/13/12 5:55:51.854 PM sandboxd: ([1021]) DumpGPURestart(1021) deny ipc-posix-shm apple.shm.notification_center

4/13/12 5:55:51.855 PM sandboxd: ([1021]) DumpGPURestart(1021) deny ipc-posix-shm apple.shm.notification_center

4/13/12 5:55:51.856 PM sandboxd: ([1021]) DumpGPURestart(1021) deny ipc-posix-shm apple.shm.notification_center

4/13/12 5:55:57.000 PM kernel: NVDA(OpenGL): Channel timeout!

"

At this point, all I can do is force a system reboot. To me, it looks like the NVIDIA card is having problems... If so, then why does it check out as "ok" when tested (by myself & local Mac Tech)?

It'd be great if there was a program like this one here [NVIDIA 8600M GT] to help me with my current delima with the NVIDIA 8800 GS in my 24", early 2008 iMac.

With my machine being as old as it is, I'm questioning wheter it'd be better to have it repaired (if it needs it) or invest in a newer model.