Theorized faulty solder connections within ATI graphics chip need to be resoldered.
Baking it in the oven at 375 for 8 minutes worked perfectly. My laptop works better than before with the new thermal paste and fresh OS install.
Remember to shield components you do not want the heat to radiate to. Also, remove the metal clips on the top edge of the logic board before baking in the oven. If you do not, heat will concentrate there (if it's not shielded) and melt the plastic mounting area.