Its also possible you are having an overheating issue.. regardless
Install EVGA precision if you haven't already http://www.evga.com/articles/405.asp
Try the following settings:
650 gpu clock speed with shader clock linked to the gpu (this will make sense when you see the utility, if you haven't before)
900 memory clock speed
fan speed 40%
Attempt the same testing you have before, if you get the same errors at default clocks then I would say its safe to assume that the card is likely faulty.