Does apple still fix the 2006 iMac that has lines acrossed the screen for free?

Here are the current replacement/repair programs:

http://www.apple.com/support/exchange_repair/

I doubt very seriously if Apple would fix a 7 year old computer for free, but you might want to check with your nearest Genius Bar.

And even if they were willing, they probably don't have the parts.

Excellent point (didn't even think of that)!!