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If you have the sprint $6 insurance that kind of issue should be covered w/o a deductable as long as it decent looked dropped. A tech will defiantly want you to do a hard reset on it first. Also you might want to try an older or official (if your not using one) ROM. If your going to take it in to be looked at make sure to put the official rom back on it (again if your using an unofficial)
Oh, passing thought just before i posted, try the microsoft remote connect software that allows you to view your screen on your sync PC, if you see the problem on the PC side than its software related if on the PPC is doing it then its more likely to be hardware only.
edit: looking at your screen looks it looks like the backlight is out of wack and may fail soon (ive seen laptops with this kind of issue) if you take it in the sun and let the backlight go out does the screen still show the issue?
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