As an update:
Apple store kept my iMac for over 1 week and states they could not replicate the issue. They would not test it with my RAM because they said 32GB is not supported in the mid-2010 released iMac.
They concluded it must be my RAM even though it was functioning properly for the past 2.5 years and passed all memory tests. I was told I would have to put in Apple Certified RAM and replicate the issue for them to take another look.
I asked Apple what type of testing they did and they claimed they tested it with different sleep settings and could not replicate the screen black out issue. They also claimed that they did not have the CGXSetWindowBackgroundBlurRadius: Invalid window 0xffffffff error come up at all in the console when I called to check. They did not clear the console and this error in fact showed up 4 times during their testing. The sleep settings were set to NEVER for both display and computer sleep... making me believe they did not in fact test with "normal" sleep settings. The problem is so random that you actually have to sit down and use the computer for typing text documents, e-mails, watching youtube, etc for the problem to start happening. Then it happens a few times in a row... sometimes once or twice, sometims 5-10 times.
Earlier this evening, I put in 4GB of Apple original Samsung RAM.
With less than 2 hours of total use (probably less than 1) with the 4GB of RAM, the iMac screen has gone black twice. This is still a fresh install of Mountain Lion as I did not want to restore from TimeMachine only to have the problem recur. I am trying to capture it on video again with the 4GB.
To make matters more confusing, the console did not have the CGXSetWindowBackgroundBlurRadius: Invalid window 0xffffffff error the last 2 times it blacked out.
I'm beginning to wonder if
device_generate_desktop_screenshot: authw 0x0(0), shield 0x0(0)
OR
device_generate_lock_screen_screenshot: authw 0x0(0), shield
is the culprit.
CONSOLE LOG containing 2 blackouts at 12:15AM and 12:20AM
8/22/13 12:15:23.193 AM coreaudiod[113]: Disabled automatic stack shots because audio IO is active
8/22/13 12:15:56.931 AM WindowServer[88]: Created shield window 0x95 for display 0x042735c0
8/22/13 12:15:56.936 AM WindowServer[88]: device_generate_desktop_screenshot: authw 0x0(0), shield 0x0(0)
8/22/13 12:15:56.957 AM WindowServer[88]: device_generate_lock_screen_screenshot: authw 0x0(0), shield 0x0(0)
8/22/13 12:16:16.007 AM coreaudiod[113]: Enabled automatic stack shots because audio IO is inactive
8/22/13 12:16:16.000 AM kernel[0]: Wake reason: PWRB (User)
8/22/13 12:16:16.000 AM kernel[0]: Previous Sleep Cause: 5
8/22/13 12:16:16.000 AM kernel[0]: 9042.897044: setDISASSOC from ATH_INTERFACE_CLASS disconnectVap
8/22/13 12:16:16.000 AM kernel[0]: AirPort: Link Down on en1. Reason 8 (Disassociated because station leaving).
8/22/13 12:16:16.000 AM kernel[0]: en1::IO80211Interface::postMessage bssid changed
8/22/13 12:16:16.000 AM kernel[0]: 9042.933439: setDISASSOCIATE ****STA SYNC DISASSOC SUCCESS
8/22/13 12:16:16.227 AM WindowServer[88]: handle_will_sleep_auth_and_shield_windows: no action for lock state 1
8/22/13 12:16:16.244 AM WindowServer[88]: Created shield window 0x96 for display 0x003f003d
8/22/13 12:16:16.244 AM WindowServer[88]: handle_will_sleep_auth_and_shield_windows: no action for lock state 1
8/22/13 12:16:17.051 AM configd[17]: network changed: v4(en1-:10.0.1.16) DNS- Proxy- SMB
8/22/13 12:16:17.000 AM kernel[0]: en1: BSSID changed to 00:1e:52:78:01:d5
8/22/13 12:16:17.000 AM kernel[0]: en1::IO80211Interface::postMessage bssid changed
8/22/13 12:16:17.000 AM kernel[0]: AirPort: Link Up on en1
8/22/13 12:16:17.000 AM kernel[0]: 9044.202272: apple80211Request[10310] Unsupported ioctl 181
8/22/13 12:16:17.000 AM kernel[0]: en1: BSSID changed to 00:1e:52:78:01:d5
8/22/13 12:16:17.000 AM kernel[0]: en1::IO80211Interface::postMessage bssid changed
8/22/13 12:16:17.000 AM kernel[0]: AirPort: RSN handshake complete on en1
8/22/13 12:16:17.480 AM hidd[54]: MultitouchHID: device bootloaded
8/22/13 12:16:18.288 AM coreaudiod[113]: Disabled automatic stack shots because audio IO is active
8/22/13 12:16:19.847 AM coreaudiod[113]: Enabled automatic stack shots because audio IO is inactive
8/22/13 12:16:28.763 AM configd[17]: network changed: v4(en1+:10.0.1.16) DNS+ Proxy+ SMB
8/22/13 12:16:28.771 AM mDNSResponder[46]: 24: Could not write data to clientPID[-1]() because of error - aborting connection
8/22/13 12:16:28.775 AM mDNSResponder[46]: 24: DNSServiceGetAddrInfo v4v6 9-courier.sandbox.push.apple.com. PID[-1]()
8/22/13 12:16:28.775 AM mDNSResponder[46]: 28: Could not write data to clientPID[-1]() because of error - aborting connection
8/22/13 12:16:28.777 AM UserEventAgent[11]: Captive: en1: Not probing 'Apple 1516' (protected network)
8/22/13 12:16:28.779 AM mDNSResponder[46]: 28: DNSServiceGetAddrInfo v4v6 14-courier.push.apple.com. PID[-1]()
8/22/13 12:16:28.780 AM configd[17]: network changed: v4(en1!:10.0.1.16) DNS Proxy SMB
8/22/13 12:16:28.000 AM kernel[0]: en1: BSSID changed to 00:1e:52:78:01:d5
8/22/13 12:16:29.460 AM airportd[825]: _doAutoJoin: Already associated to “Apple 1516”. Bailing on auto-join.
8/22/13 12:16:29.472 AM airportd[825]: _doAutoJoin: Already associated to “Apple 1516”. Bailing on auto-join.
8/22/13 12:19:06.338 AM coreaudiod[113]: Disabled automatic stack shots because audio IO is active
8/22/13 12:19:06.872 AM coreaudiod[113]: Enabled automatic stack shots because audio IO is inactive
8/22/13 12:20:07.530 AM WindowServer[88]: Created shield window 0xa4 for display 0x042735c0
8/22/13 12:20:07.530 AM WindowServer[88]: device_generate_desktop_screenshot: authw 0x0(0), shield 0x0(0)
8/22/13 12:20:07.540 AM WindowServer[88]: device_generate_lock_screen_screenshot: authw 0x0(0), shield 0x0(0)
8/22/13 12:20:24.000 AM kernel[0]: Wake reason: PWRB (User)
8/22/13 12:20:24.000 AM kernel[0]: Previous Sleep Cause: 5
8/22/13 12:20:24.000 AM kernel[0]: 9278.160443: setDISASSOC from ATH_INTERFACE_CLASS disconnectVap
8/22/13 12:20:24.000 AM kernel[0]: AirPort: Link Down on en1. Reason 8 (Disassociated because station leaving).
8/22/13 12:20:24.000 AM kernel[0]: en1::IO80211Interface::postMessage bssid changed
8/22/13 12:20:24.000 AM kernel[0]: 9278.199077: setDISASSOCIATE ****STA SYNC DISASSOC SUCCESS
8/22/13 12:20:24.226 AM WindowServer[88]: handle_will_sleep_auth_and_shield_windows: no action for lock state 1
8/22/13 12:20:24.228 AM WindowServer[88]: Created shield window 0xa5 for display 0x003f003d
8/22/13 12:20:24.228 AM WindowServer[88]: handle_will_sleep_auth_and_shield_windows: no action for lock state 1
8/22/13 12:20:25.051 AM configd[17]: network changed: v4(en1-:10.0.1.16) DNS- Proxy- SMB
8/22/13 12:20:25.000 AM kernel[0]: en1: BSSID changed to 00:1e:52:78:01:d5
8/22/13 12:20:25.000 AM kernel[0]: en1::IO80211Interface::postMessage bssid changed
8/22/13 12:20:25.000 AM kernel[0]: AirPort: Link Up on en1
8/22/13 12:20:25.000 AM kernel[0]: 9279.468678: apple80211Request[10310] Unsupported ioctl 181
8/22/13 12:20:25.000 AM kernel[0]: en1: BSSID changed to 00:1e:52:78:01:d5
8/22/13 12:20:25.000 AM kernel[0]: en1::IO80211Interface::postMessage bssid changed
8/22/13 12:20:25.000 AM kernel[0]: AirPort: RSN handshake complete on en1
8/22/13 12:20:25.449 AM hidd[54]: MultitouchHID: device bootloaded
8/22/13 12:20:36.377 AM configd[17]: network changed: v4(en1+:10.0.1.16) DNS+ Proxy+ SMB
8/22/13 12:20:36.385 AM mDNSResponder[46]: 28: Could not write data to clientPID[-1]() because of error - aborting connection
8/22/13 12:20:36.389 AM mDNSResponder[46]: 28: DNSServiceGetAddrInfo v4v6 45-courier.push.apple.com. PID[-1]()
8/22/13 12:20:36.389 AM UserEventAgent[11]: Captive: en1: Not probing 'Apple 1516' (protected network)
8/22/13 12:20:36.000 AM kernel[0]: en1: BSSID changed to 00:1e:52:78:01:d5
8/22/13 12:20:36.403 AM configd[17]: network changed: v4(en1!:10.0.1.16) DNS Proxy SMB
8/22/13 12:20:36.646 AM airportd[843]: _doAutoJoin: Already associated to “Apple 1516”. Bailing on auto-join.
8/22/13 12:20:36.657 AM airportd[843]: _doAutoJoin: Already associated to “Apple 1516”. Bailing on auto-join.
8/22/13 12:20:36.667 AM airportd[843]: _doAutoJoin: Already associated to “Apple 1516”. Bailing on auto-join.
8/22/13 12:21:13.984 AM coreaudiod[113]: Disabled automatic stack shots because audio IO is active
8/22/13 12:21:14.518 AM coreaudiod[113]: Enabled automatic stack shots because audio IO is inactive
8/22/13 12:21:40.789 AM coreaudiod[113]: Disabled automatic stack shots because audio IO is active
8/22/13 12:21:41.324 AM coreaudiod[113]: Enabled automatic stack shots because audio IO is inactive
_______
I'm also not sure if the WiFi issues are back but to a lesser degree. When I wake from sleep, I have to wait about 20 seconds sometimes for the iMac to reconnect to WiFi. At least I don't have to turn off WiFi and reconnect it at random times. I haven't tried to remote access yet since getting this back.