Hi,
Is this a constant issue?
Try the following.
1) Boot Mac - boot up with command+option+R+P keys pressed then release after three bootup chimes if you get a normal grey screen with the Apple logo that is good.
2) Now reboot but from your apple install disk while pressing the option key and then selecting to boot from the disk rather than the HDD. When it came to the "Choose language" screen.
if there is no distortion on the screen doing the above then I suspect it to be a software issue and not hardware, so a clean install of OS X might be the way to go.
But if you still get the distortion may have to replace motherboard, something could have failed IE the graphics processor.