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I have a Sony Vaio VGN AR520E with a NVIDIA GEFORCE 8400M GT. After a Windows update, the screen started to go weird and the driver for the graphic card could not be recognized. The resolution is stuck to the minimum and cannot be changed. I tried everything: installed and unnstalled driver a few times, both the official Sony Vaio driver, the modified one, restored the notebook, update to Windows7 but nothing worked. Now I wonder if it's not a hardware problem. Anyone can help? Thanks. This is how the screen looks.
uninstall the update that caused the issue then look what was updated and don't install anything that relates to the graphics.
you could also uninstall the card and reboot the machine and let it re install.
When the VAIO logo is shown at boot, press the F2 key to enter the BIOS. If the BIOS looks just as messed up as your Windows Welcome screen in the screenshot, it's hardware.
The relevant bit of hardware could be the display itself - frankly I don't like the look of the top left corner of your display, it looks like the liquid crystal cells in the display have been crushed and are bleeding into the structure around them - the cable that connects the display's electronics to the mainboard, or the mainboard (with the graphics chip itself).
To eliminate the display and the cable to the display, connect an external display via VGA and check if the image in the BIOS or while booting is clear of these problems on that. If that's the case, it's not a faulty graphics chip.