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I found the solution. After running antivirus program and it not finding anything. I kept searching and found that enhanced contract was some how selected. Went into prefences, universal access, and moved the slider to Normal and its fixed. Woohoo!!!!! Some people described it as 256 color...

When OSX finishes loading the desktop looks like its in 16 color mode(oil painting). I can change the resolutions and display color (thousands/millions) but it still looks like 16 color. I did notice that some weird power point presentation came up with what on a PC would look like malware...