MBP froze with discolored screen. Reboot stalls at Apple logo

Model A1260 MBP running 4GB RAM on SL 10.6.7

I have checked the posted guides but can not find a match to my circumstances. I've done all the sorts of suggestions for similar problems as follows:

MBP has never had any previous problem. Opened lid today and the screen colors were wrong (lots of extra lime green pixels) & not refreshing iTunes mini-player. MBP was non-responsive so I rebooted.

Reboot reports:

• Hard drive sound heard
• Chime heard
• Apple display seen
• Rotating disc stalls after ~2min
• Tried with external display on DVI port - no difference
• Tried removing battery and using external 85W power supply - no difference. (Battery is fully charged and only on ~160 cycles).

Other obs: MBP is still making sounds when keyboard is activated. Fan sounds are heard. On closing the lid, screen stays on and sleep doesn't activate.

Any help would be appreciated. Thanks in advance.