Graphics error - strange artifacts instead of shadows etc.

Hello! I am experiencing a serious graphics error that I wonder if anyone can help me to diagnose. In short, I have a lot of artifacts on the screen where it displays just random bits and pieces -- sometimes just blocks of black, sometimes pink or grey static, sometimes with shadows from other images or icons superimposed. This mostly affects portions of the screen where you normally see shadows, translucency etc. I will try to post a picture, but since most menus and buttons are obscured, it's a bit difficult at the moment! (Note, though, that this webpage displays normally.)

Possible origin of error:

Last night I started the game Crusader Kings 2 on Steam, and loaded the "Game of Thrones" mod. I have played it before (though not much), and it has worked well enough. The one difference with this time was that I finally had succeeded to change the music playlist to play the GoT TV show soundtrack – I'm not sure if that is relevant, but that was the one thing that was different. So the game loaded normally, I selected new game, chose a starting point and pressed play. The next thing I knew, the map that just a second a go looked normal now was a complete mess. Plygons stretced everywhere, lines going haywire. It was totally unplayable. It was similar to the things I experience now, but on another scale. I quit the game and came back to the Finder. Everything looked normal. I went to bed and put the computer to sleep. Next day, when waking the computer, these artifacts appeared.

My hardware:

The computer is an iMac (mid 2009), 3.06 GHz Intel Core 2 Duo, 8 GB RAM with an AMD Radeon HD 4850 card. I'm running the last Mavericks update, 10.9.?. (I would change the specs in the footer, but the menus are all unreadable.)

What I have tried so far:

• Logged out and back in -- no change
• Restart -- artifacts are now on the login screen too.
• Shut down, Reboot-- still no change
• Reboot into my BootCamp partition -- artifacts appear there too.
• Safe start -- no artifacts, ran Disk Utility with no errors.
• Reset SMC, normal reboot -- artifacts are back
• Reset PRAM -- no change

What I'm thinking:

I'm far from an expert, but I think there is some problem with the graphics card, that appears only one some GPU-accelerated graphics effects like drop shadows and the like. I'm guessing that the reason it worked in safe start is because the system cuts down on graphical extras and runs everything on the CPU.

Now for my questions:

• What do you think, is this a software error or a hardware error? Can the game have corrupted my graphics card on some level?
• If this is a software error, is it possible to fix in some way? Reset some memory on the graphics card, perhaps?

Thank you for reading!