This sounds like it might be a defective CCD imager. If so, Canon should fix this for you for free worldwide, and may also include free shipping both ways (free shipping varies with countries). This is regardless of your camera's warranty status. Please check this link for more info.
Applicable cameras include:
A40, A60, A70, A75, A80, A85, A95, A300, A310, S1 IS, S60, S200, S230, S330, S400, S410, S500, SD100, SD110, IXUS V2/V3/300/400/430/500/II/IIs, IXY Digital 200a/300a/320/400/450/500/30/30a
SOURCE: My Canon A95 has horizontal grid lines on the LCD
If the menus and icons look normal, but images are distorted or discolored, you may have an image sensor (CCD) problem. See Canon's service notice regarding this issue here. Canon will repair your camera at no cost regardless of warranty. Contact them at your regional Canon service agency.
Testimonial: "Thanks. I will contact Canon to see if this can be repaired."
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