This sounds like it might be a defective CCD imager. If so, Canon should fix this for you for free, including free shipping both ways. This is regardless of your camera's warranty status. Please check this link for more info.
Applicable cameras include:
A40, A60, A70, A75, A80, A85, A95, A300, A310, S1 IS, S60, S200, S230, S330, S400, S410, S500, SD100, SD110, IXUS V2/300/400/430/500, IXY Digital 30/30a/200a/300a/D320/400/ 450/500
Testimonial: "thanks you very much for the info..."
If a hard reset doesn't do it - this model is know for defective CCD sensors, there is a company that sells parts for small consumer style digital cameras : Canon Repair NYC You can order the part and install it yourself or let them do it for you.
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Can I select a focus point in AiAF on the Cannon G 7
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