That sounds like a definate hardware problem; the only question is what is causing the problems, the video card or the motherboard. If you put the video card into another machine, does it show the same problems? If you use a different video card in the K7VM2 motherboard, does it show the same problems?
I've recently seen a couple older nVidia cards (specifically a par of TNT M64 cards) suddenly go bad where there are strange horizontal lines that seem to "trail" other edges on the screen; the problem was solely in the video card & replacing them was the solution.