Don't fret, you still got a bargain at that sale. This sounds like it might be a defective CCD imager. If so, Canon will fix this for you for free, including free shipping both ways. This is regardless of your camera's warranty status (including whether you bought it used or new).
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
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