Chosen Solution

I executed a factory restore on this Imac and installed Catalina. ISSUES — The problems I am having are shown in the attached image. Lines on screen change in appearanceNone appeared during the 15hr+ multi-pass format of the drive ATTEMPTED — These are processes I have attempted. Factory restore and clean OS install Any information or suggestions appreciated as the Genius Bar is 2-3 weeks booked due to the current state of the world. Stay safe all!

Sadly Apple won’t service your system as its too old ;-{ Vintage and obsolete products As to your systems problem, your GPU boards VRAM chips have a problem!

Its a fair amount of work to take out iMac Intel 27" EMC 2374, AMD Radeon HD 4850 Video Card Removal & Repair in this case I don’t see baking as a solution as the VRAM chips don’t suffer the same way the GPU chip does. Morelikely you’ll need to replace it. As to why In Recovery or Target Disk Mode the screen doesn’t have this issue. Your system has in fact two! Graphics engines. The discreet one (AMD Radeon) but a second one within the CPU! Intel graphics. When you first start up your system you are using the Intel graphics and then it switches over to the AMD GPU.