OSX wont save external monitor screen arrangement settings, weird graphics issues with displays
That looks like a GPU failure and not any sort of software issue.

Have you tried making a new user account or does this garbled text happen at the pre-log in / pre boot screen?

Worst case, you would need to bring a second bootable OS to that Mac to be sure it's not the OS if you get clean graphics in the startup mode, but garbled once the OS takes control of the GPU and enables the standard rendering options.

If you can work with it normally before the image fails, make a new user account and make sure that new account has the issue before going to the trouble to make a second OS or erase/install.