you were right it definitely spazzes and glitches out:-) darn that is weird, but kind of cool in a surreal sense ;-) This looks like a bad video processor, or in the case of your iPod the ARM processor. Especially since it does it after a few minutes. Possibly heat related failure. Of course you do want to do the the habitual restore, just to rule out any firmware issues. Also check your ribbon cables etc. I would even go and purchase a relatively inexpensive display and see if that makes a difference. Ultimately, looking at your pic, I do not think that this is a LCD issue, but a processor issue. May be a professional reflow or reball might work. Hope this helps, good luck.
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