I have the same problem on my Canon Powerahot A80.
I'm sending mine off to a UK approved Canon Service Centre; they say it sounds like a 'known fault' which might be covered under a free-of-charge Canon recall.
The Canon website makes reference to this, but only describes it as 'image abnormalities'; see:
https://self-service.canon-europe.com/ce/pages/
I'll let you know how it goes.
Andy_c101, September 2007