Faulty Sapphire 5850 Toxic?

Hi,

I recently started having strange graphic issues when gaming. Since building this rig about 4 months ago I've had no issues at all but about 4 days ago I started having major issues while playing World of Warcraft. Was getting major artifacting with lines running all over and certain surfaces blinking. Though it might be the game as the problem seemed only to be in WoW, so I messed with various settings and nothing helped. Then I tried updating my graphics driver and that worked for about a day. Then it started back up again but now in addition it would occasionally freeze, go to a full screen of a random color, then black, then return for normal for a bit. Once it dropped to desktop and windows notified me that my graphics card had failed (I forget the exact wording) but had recovered, then popped back to normal. This pausing issue now keeps getting worse getting up to maybe a few seconds between pauses and the artifacts are getting worse as well making the game unplayable. Also now the issue extends to other games like Mass Effect 2 where certain surfaces blink or seem to be covered with static. Outside of games however there are no problems. On the desktop and when web browsing all is totally fine. Tried re-updating the graphics driver (to newest 10.8) in case I messed something up the first try, but with no improvements.

System specs:

MSI P55-GD85 Mobo
4GB RAM
Windows 7 64bit
Sapphire Radeon 5850 1GB Toxic Edition
CORSAIR CMPSU-750TX 750W PS

I have checked temps with several programs and none seem to be unusual and to my knowledge all drivers all updated.

So I guess I'm wondering if the card has gone bad or if there is some other issue going on here.

Thanks in advance for any help!