Support finally gave up, they didn't have any more tricks to try. They asked me to go to their store with this 10 kg of metal and check with geniuses. This is ridiculous. No way I'm going to do that unless it's a hardware failure which is not the case with this problem.
They asked me to raise this question to feedback team which I did. I request all of you guys to go to the following link and give them feedback. Unless they know this problem and acknowledge they are not going to fix it in next update.
http://www.apple.com/feedback/
Meanwhile I keep seeing some spectacular display of this weird graphic, I'll try to capture some more video.
This is random and doesn't happen always. It certainly doesn't happen when you use iMac for short time let's say 30 minutes or so and shut down. 3-5 hours of usage does show it more often. I'll say 90% of time.