Fortunately I think it is indeed software. I was playing World of Warcraft and the game froze, taking the display with it. After poking around in Console and the WoW forums it seems to be a case of WoW crashing and taking the WindowServer with it.Oh dear! what is this and how happened?
Have you recovered from this mess (or chess)?
It reminds me of a 48k ZX Spectrum.
Powering the machine off and on resolved it. I've enabled SSH (been meaning to for a while, but keep remembering while I'm out!) so I can do a graceful restart if it happens again.