This is well known issue with many iMacs G5 and Intel based. It is probably a defect in design. See the following link for a possible law suit against Apple.
http://www.cultofmac.com/class-action-lawsuit-over-imac-display-problems/6562
There is also an online petition to sign at:
http://www.petitiononline.com/mod_perl/signed.cgi?maclines