[sjt99]

Classic symptom of a bad video RAM chip. These are soldered to the main board, so if you are not handy with a soldering iron, you might be better off trying to get another console. The video RAM chips are relatively cheap (about $1 a pop), but there are 8 of them in there, all in a long row on the left half of the motherboard (they are TMS4116s). One of them is dead, so you have a bit stuck and that is what's garbling your display data. This is actually a relatively common problem, as I've fielded questions from about half a dozen folks this year on it.

I should have told him to look at the ram, as well.
It may not work but he can try and place a known good ram chip over the originals one at a time and see if it clears up.
It's something I've done on arcade boards, for a quick id

Just bend the pins of the dram slightly in and place over the chip on the board, hold it in place (pressure down) on it.
Make sure all pins are touching the board chip.
Turn on the console and look at the screen and note any change.
It is possible for more than one chip to be bad. If it changes but doesn't completely clear up, try it on another chip and see if there are any more changes.