Several manufacturers have been releasing service bulletins over the last several days regarding defects in some CCD sensors in cameras that are about 2 years old. The issue manifests itself as a distortion of the image on the LCD or electronic viewfinder. See below for a round-up of the manufacturers and links. For a great pic of an actual LCD, check out this link from Engadget. According to an article on Slashdot, a problem with epoxy packaging allows moisture to reach the sensors.
Imaging Resource has a nice article with some good detail.
From dcresource.com, where Jeff rounds up the models nicely:
If you're having problems with certain Canon, Fuji, Minolta, or Sony cameras then you may be eligible to have the camera repaired at no charge. As it turns out, the Sony-made CCDs in some of these cameras were not produced correctly, which may result in majorly distorted images. These problems seem to be most pronounced in humid areas of the world. I've listed the various cameras that may have this problem below. Click the link and enter your camera model for more info.
Also, Nikon has released service bulletin for the COOLPIX 3100, 5700 and SQ models
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