Similar situation with Canon. Had a Powershot digital camera for over 5 years, 3.2 megapixel. The LCD display started to fail, looking like it was melting, and sometimes even just going black. The photos echoed what showed on the display. I was about to toss it into the trash and make my way to Circuit City. First, tho, I visited the Canon website to see what the newer models were like. I happened to come across a notice regarding certain camera models that were experiencing LCD problems in humid areas of the country (mind you I live in the desert, but it does get humid sometimes) cause by a manufacturing defect, and that they would repair these units free of charge if this were the problem, no matter how far out of warranty they were. My model was on the list. :-) Bingo.
So I called the number on their website, and asked them for an RMA. They immediately emailed me with an RMA number, and a UPS or Fed Ex, can't remember, shipping label that was prepaid. I sent the camera back. They emailed me when the camera was received, and told me they were about to work on it. Once they opened it up, they sent me another email saying that all repairs would be free of charge. After about a week and a half, I received a package from Canon. I opened it, and lo and behold, there was a letter explaining that they did not have the required parts to fix my old Powershot, and they were enclosing a unit of equal or greater value. My god, this was a 10+ megapixel camera with a large LCD display! Way better than what I had sent them! It's refurbished, but it looks and barks like a new one. I'm a Canon customer for life!
Sue