I get a very strange problem with my Xbox 360 250GB Slim model, I previously sent it in and they returned it back with no known problems found. I even sent the attached images of my problem.
Basically this mainly happens when I playing a game like COD:BO2 or Halo or whatever after a period of time. I'll be playing and all of a sudden a bunch of colored rainbow circles will appear and dotted vertical lines appear aswell. It still is playable but it is very hard to play, and often times I quit because of the circles/lines distorting my view so much.
I've tried different HDMI cables, tried not using them and used the colored cables. I've tried moving the Xbox to a different TV. The problem persists. When I sent it in a while back, they only sent it back with no problems found.
I've also tried resetting the Display settings which was a reported fix in a similar topic, to no avail.
(This is NOT my photo, but it is my problem) http://tinypic.com/view.php?pic=2i7u904&s=7#.Um7HePmsiSo (Stolen from: http://forums.xbox.com/xbox_forums/xbox_support/f/7/t/17002.aspx)
If it helps I will upload my own photo, which will look a lot like the photo above, later.