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windows flicks

Last Modified: 2016-11-24
A colleague asked me to check why his DELL studio laptop does not boot Windows 7 Home Premium anymore. He said he did not install anything recently.
Windows boots until it shows the loading screen with flowers and birds, and then it the screen starts flicking about couple times a second. I can move the mouse cursor, but it seems the cursor image is corrupted somehow.
It boots fine in the safe mode though.
I tried the following:
1) Checked for viruses using a LiveCD from AVG. I had found 7 trojans, I have deleted them.
2) Checked the filesystem on boot. It found some errors, says it has fixed them.
3) Executed the command: "sfc /scannow". It said nothing was corrupted
4) Tried the Repair Your Computer from the F8 menu. It said nothing wrong was found.
5) Using msconfig disabled all the services and autoload software
6) Ran the DELL diagnostic utility. It says the hardware is fine.
7) Removed and put back the battery.

What else I can try (except reinstall the OS)?

A similar issue is described here http://forums.techguy.org/windows-7/934231-windows-boot-up-flickering-screen.html but there is no solution.
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