The display corruption problem may well be a corrupt video (driver) kext file. This was recently discussed in a user group meeting where Apple had basically replaced all there was to replace and the problem persisted. A clean installation finally resolved the matter.

I do not recall just what kextfiles & etc are disabled in safemode, but your experience that when booted in safemode the display is OK seems to point back to a corrupt file.

It could also have been a problem with the graphics processor (was it an Nvidia?) that could be covered by an extended warranty (due to a known problem with them). I still think it more probable that it is a corrupt file issue.