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I know how to get similar "broken horizontal lines" without any physical damage. The first day I got my iLiad I let it stay on usb connection with "books" set to "MMC card", transferring files while iLiad's battery drained to zero. Horrible, how the screen suddenly developed the horizontal lines. I connected to power source, rebooted and the screen went out of sync! I turned it off and could see the black horizontal lines. Finally I decided to use it anyway and, Thank God, after about 3 hours of use the lines disappeared by themselves.
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