Yesterday Apple released the 27-inch iMac Graphics Firmware Update 1.0, which "updates the graphics firmware on ATI Radeon HD 4670 and 4850 graphics cards to address issues that may cause image corruption or display flickering." But apparently the update isn't a sure fix: the information page on the update says that "if your screen remains black after applying the updater or if you continue to experience image corruption or display flickering after successfully completing this update, contact AppleCare or an Apple Authorized Service Provider."
In that forum topic, which has now grown to 105 pages, several people are reporting that the update didn't help, or only helped temporarily. And the imac.squeaked.com site, set up to document the flickering screens and other display oddities, has added a "Flickering after Firmware Update" page with 15 reports so far.
Some, however, were able to get it working after resetting their machine's PRAM (parameter RAM), a time-honored fix for Mac glitches.
More From bMighty:
So putting the available information together, this seems like the best way to proceed: