Line with bubbles on blank screen

If resetting does not fix it, I'd hazard a guess there might be damage to the screen itself.

Did you try a reset? Just check the manual on how to reset your device.

Triple click the home button. Then double tap the VoiceOver off button. This should allow the device to return to normal operation. Then you can reset by pressing and holding both buttons (power and home) until it resets if you need to.

Did you try

Instructions

1. Frozen Screen or Unresponsive Kindle
   • 1 Unplug the Kindle.
     
   • 2 Move the power button to the right and release. You should see a green LED light for two seconds.
     
   • 3 Move the power button to the right and hold for five seconds. The green light should blink three times and then the screen will go blank. Release the power button after it does.
     
   • 4 Turn the device back on by sliding the power button to the right and releasing it.
     
   Perform a Hard Reset
   • 5 Perform a hard reset if the previous steps are unsuccessful or if the Kindle screen is showing lines.
     
   • 6 Slide the power button to the right.
     
   • 7 Hold for 15 seconds.
     
   • 8 Recharge the battery if the device continues to be unresponsive.
     
   • 9 Restart the Kindle after charging.
     

Read more : http://www.ehow.com/how_7655306_reset-kindle-3g.html

Have you tried the pinhole reset method yet.?

The Video controller may have become defective. If the tablet was dropped or got wet; the tiny electronic parts inside the case could have been damaged. The mainboard is thin and crowded with diodes, capacitors, resistors, and transistors and lays beneath the screen. This circuit board cannot absorb shock and one too many jolts can fracture or blow devices on the board. You may not have had a total breakdown, however one seems to on its way. Sorry for the bad news.

Sounds like it's cheap junk if you wont it in an arcade.

Probably has an internal memory issue.

try holding the reset button down until the tablet turns off then give it a minute or two before trying to turn it on.

Hardware issue, your device's screen is more than likely broken. If you have a warranty on it, act on that, if not, do what you can to replace it.

If you can tell me what the Os do you use, it could be must better.

On XP you can try this:
Boot computer and press Ctrl+Alt+Delete twice when you See Windows welcome screen / login screen. It'll show classic login box. Now type "Administrator" (without quotes) in username field and leave password field blank, press Enter and you should be able to login Windows.
Now you can reset your account password from "Control Panel -> User Accounts".

On Win 7 or Vista:
Ctrl+Alt+Delete won't work, you have to use some windows password reset tool. I recommend Windows Password Reset.
Resource: http://www.windowspasswordreset.net