This does seem to imply that some hardware has gone bad in your system, but it could be software related. What type of video card do you have? Have you loaded the latest drivers from the manufacturer? Also, try reseating your video card - power the system down, pull the card out, put it back in. If that doesn't fix it, see if it could possibly be a RAM problem - try swapping out the RAM, or, if you have more than one stick of RAM in the machine already, try alternating between sticks.
-Matt
Quick PC Repair (Serving San Diego, CA)
www.quickpcrepair.com