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I recommend seeing an expert. I heard that to replace the internal screen only costs about 20 dollars if you do it yourself. You should look into buying a new screen(internal) but about the leaking LED's you should really try to see an expert or get some support from Sony.
Youll have to open it up and look if the screen is cracked or the cover, the screen is behind the clear perspex of the outer case. If its the screen then this will help: http://cgi.ebay.co.uk/LCD-SCREEN-REPLACEMENT-For-PSP-SHARP-W-BACKLIGHT-Tool_W0QQitemZ200215724197QQihZ010QQcategoryZ127746QQssPageNameZWDVWQQrdZ1QQcmdZViewItem
if the psp screen is anything like a laptop it will have a backlight that lights up the screen what can happen is you can break the light and while you will still see things on the screen when you look closely but it wont be illuminated. i had a friend that dropped his laptop and smashed the backlight he sent it away and got it fixed
i suggest you send it to sony to get it fixed