Cannot boot up. Cannot get a Gray Screen to open Laptop

I purchased a refurbished MacBook Pro, Model A1226 – 2.2 GHz laptop directly from Apple.  It’s been working great until this evening.  When I pressed the Power Button I got a screen with horizontal white lines and vertical dark blue lines (see photo attached).

I used my iPad to look for answers on the Internet.  I tried holding down Command R at the same time as the Power Button and it went correctly to the gray screen, but then the OSX Utilities screen popped up and I selected Disk Utility.  Under the First Aid tab I highlighted the disk and went pressed the Verify Disk button.  It did its thing and said Everything was OK in Green.  Then I hit Verify Disk Permissions and there were several items that were listed in the Detail box.  I then hit the Repair Disk Permissions and again received the statement Everything was OK in Green.  The restart button came up which I clicked on and the Mac restarted properly, going directly to the gray screen with the little gear turning, but then it stopped turning and the computer froze.  I forced a Shut Down with the Power Button.  Gave it a minute, pressed the Power Button again and I am back to the white and blue lines.  I tried several permutations using different buttons, Shift, Control, Alt, Command R, etc. including holding down the Power Button for 5 seconds and it gave out a loud noise, like a squeal.  Now it only comes up with the White and Blue lines and none of the other fixes seem to work.

Anybody experience the same problem?  If so, how did you resolve it?  Should I put in the Mac OS X disk in the DVD unit and have it boot from that?  I have both the Mac OS X Leopard and the Snow Leopard CD’s.  Is there another software program that can run a diagnostic via CD or External Drive (flash drive) or does it appear that a part(s) have gone bad.  Please advise soonest.  Thanks!