When recording and playing back the view screen is distorted with alternating lines.

It sounds like a codecs issue on your computer. A codec is a program that compresses data to enable faster transmission and decompresses received data. You didn't say what operating system you're computer is but you can download codecs packs from Microsoft or Apple directly from their site. Be very careful using any other codecs from other websites as they may contain malware!

Try cleaning the head

Have you tried cleaning the recording heads? Use a dry type cassette cleaner only. It's just like a vcr head cleaner tape, only in the small mini-dv tape size.

You are in luck. Sorry for the trouble but your model Elura 50 still has the CCD advisory from the factory for free repair. Send it in for CCD advisory before it is too late! When all functions are working but has distorted image in camera mode is due to CCD chip. Good Luck -James. for further assitance email, go to www.camerarepairjapan.com

I looked into to this it is the ccd and Canon will fix it for free (shipping included), as stated below. I have copied what has helped me!
It has recently come to our attention that the vendor-supplied CCD image sensor used in this Canon digital camera may cause the following malfunction: When the product is used in recording or playback mode, the LCD screen and/or electronic viewfinder may exhibit either a distorted image or no image at all. While reports of this malfunction have been rare in the United States, we have determined that it may occur if the product is exposed to hot and humid environments.
Effective immediately, and regardless of warranty status, Canon will repair, free of charge, products exhibiting the above-mentioned malfunction if the malfunction is caused by the CCD image sensor. Canon will also cover the cost of shipping and handling in connection with this repair.
U.S. residents are kindly directed to contact the Canon Customer Support Center for further assistance at 1-800-828-4040. Support hours are Monday thru Friday - 8:00 AM to 12:00 midnight; and Saturday 10:00 AM to 8:00 PM (all times EST). Alternatively, if electronic support is preferred, please send your email to [email protected]

The most common cause of this is a failed image sensor. Usually the playback mode will let you view pictures taken before the issue happened just fine and you will also be able to view the menu system just fine. When viewing the screen in an image taking mode, however, there is typically discolorations, horizontal or vertical lines, image bluring or distortions, or simply a black screen.

This situation, if caused by the image sensor, has to serviced and cannot be fixed by the user. If you are within your one year warranty and no user damage has been done to the camera, the camera will be fixed at no charge. If beyond the 12 month period however the customer may opt to have the unit repaired at a cost or take advantage of the Canon Loyalty Program and upgrade to refurbished S3 IS at an alternate discounted price.

Hope this helps.

Sincerely,
HeavyDLB

Have you tried to run:
Coax from the wall to your cable box.
Coax from the cable box out to the VCR cable in.
Coax from the VCR cable out to your TV?

What connections does your TV have? RCA or coax?

if it records the distortion then i suspect the guides are out of adjustment or your capstand roller is pushing the tape to high on the guides. need to have a profession serviced.

what is the model number? if it's 10 years or older you are most likely dealing with bad surface mounted capacitors.

You may have a problem with the image sensor device (CCD). From October 3, 2005 through October 2, 2007, Sony will repair, free of charge, affected products exhibiting the above-mentioned problem where it is caused by the image sensor device. Sony will also cover the cost of shipping and handling from and to addresses within the United States and US Territories for service to correct this issue. To see if you have this problem: Power On your camcorder (make sure the battery is fully charged). Check the LCD screen and verify that the display icons are turned on. If you cannot see the icons, press the Display button until the icons are visible. Put a tape in the camcorder. With the lens cap off, record some video. NOTE: Be sure to speak during the recording so the video will contain your voice. Rewind this section of the tape (using tape counter to verify start of your recording). Play back the recorded video and use the LCD screen on the camcorder to view it. You should hear the audio you recorded and the Display icons/text will still appear. If your camcorder is affected by this CCD issue, the picture will either be extremely distorted, or there will be no visible picture (just a blank LCD screen with the display icons still visible).