Ok, I've just come back from the Genius Bar with a new iPhone.
The thing that got me the new phone initially was the fact the sleep/wake button wasn't working properly, as it was most easily demonstrated. However, when he brought the new phone out, I asked "D'you not want to see the camera issue?"
"The purple lines? Oh I've seen that plenty enough times already," he said, "it's a hardware malfunction to do with the megapixel sensor"
I asked him to clarify, that if I'd brought the phone in with the purple lines alone, would it have been replaced with a new phone, as being a hardware issue. The answer was an emphatic "Yes."
It's a hardware problem. Nothing you can do - no amount of voodoo moves - will fix it. You need to take your phone in for replacement. If you have this problem, you need a new phone, end of story.
HTH
G