Asus A8N5X - deep pink cast/cpu/controller/graphic card problem ?

I built a new system using the configuration below, installed Windows XP and everything worked just fine for a few days....until,

Booted the system up after three days.... windows and all the applications have a deep pink cast (almost like when the older tube type TV's lost one of the three colors). By the way I have brand new 20 inch Widescreen Dell monitors that is highly rated. Along with the pink cast, the screen has glimmering specs as if some of the pixels are brightly lit. The strange part is that the pink cast and the glimmering specs go away if i reduce the resolution to 800x600!​

Yesterday (four days since I assembled the system) In an attempt to fix the pink cast problem, I tried to reinstall the latest version of the Graphic card drivers from the ATI website without luck, and also tried a reinstall of Windows XP. When I tried to reinstall the OS with the CD in the DVD drive, the display flickers, blacks out.. comes back again. It was hard to even get into the Bios setup to change the boot up to CDROM to reinstall the OS. Even the Asus splash screen flickers intermittently. Without the install disk in the DVD drive the system boots up fine but everything on the screen still has a pink cast.​

Opened the case and found that the Big Typhoon fan that I used with the AMD CPU is hanging loose! Apparently the nut connected to the back plate behind the CPU/Mobo broke! The instruction sheet that came with the Thermaltake Big Typhoon (BT) fan recommends leaving the original back plate that comes with the ASUS Mobo's and use the top plate that comes with the BT. I figured the CPU might have overheated or got damaged without proper contact with the BT fan that had slid of, and that is what might be causing the pink cast or the screen flickering. Anyhow I reconnected the fan .... and again minus the XP install CD in the DVD Drive the system boots up but every thing on the screen is a deep pink. At the lowest resolution 800x600 the color cast goes away and everything is back to normal. That is leading me to believe that the CPU is probably okay and survived the duration that the heat sink was not in contact with the it.​

The other observation is that that the passive Zalman heat sink to cool the onboard Chipset nForce4 in lieu of the original ASUS fan type cooler, is extremely hot. The temperature of the Zalman heat sink is close to 70, which is very high. But that is the case with every geek who has done the exact same (Zalman reviews on the newegg.com website) thing without any reported problems.​

So here I am.. confused. Is the screen flickering on boot up when I try to reinstall the OS with a CD in the DVD drive, or the deep pink cast at anything but the lowest resolution due to ....
1. Bad graphics card? If that was the case then there should not have been any trouble booting up and trying to reinstall the new OS!
2. CPU Damage due to overheating ? If the CPU was damaged should it not stop working altogether. Windows continues to work with the deep pink cast at higher resolutions and without the pink cast at lowest resolution.
3. The Chipset nForce4 is damaged? As I explained it is extremely hot....cannot touch it. But hundreds of other geeks who have attempted the mod have not reported a problem.
4. Maybe the Mobo itself has gone bad..

Has anybody had similar experiences?? Or can help me diagnose what the problem is?

Thanks,
Observer

Asus A8N5X Mobo
AMD Athlon 64 300+ Venice (Retail)
Xtasy Visontek X300SE 256MB Hyper memory PCIE Graphic Card
Big Typhoon CPU Cooler
Zalman Chip Cooler (replaced with the fan type that comes with the MoBo)
Corsair 1GB (2x512) Value RAM
Audigy 2ZS Platinum
Hitachi 80GB HDD IDE (Primary)
Seagate 300GB HDD IDE (Secondary)
Liteon DVD ROM
NEC 8X Single Layer DVD-RW
Antec Server Cabinet
Dell USB Keyboard
Microft Optical Wired Mouse