Vertical Lines on My iMac ;-( Doesn't look so pretty with them.
Apple has a service program for (now at least) earlier iMac G5's within a specific Serial # range. Here is a link to see if yours qualifies....
http://www.apple.com/uk/support/exchange_repair/imac.html
Otherwise, I suggest a call into Apple and make a formal complaint and get a case #. Yours isn't an isolated case. If this particular issue is reported enough times then Apple would be foolish not to extend the service program to cover all iMacs that are faulty or defective.
Asking customers to pay for expensive repairs to faulty parts just a little time out of the standard warranty is not good for their business. They need to step up and sort this out.
Apple Customer Support...Be sure to get a case #
http://www.apple.com/support/contact/