I am able to playback previously recorded material before it stoppped working. I am able to record soud. Even on standby, i stil can't see the picture. The icons, battery life, dates, etc. are all visible on te blue screen

Well, you could be a little more clear on where you see the blue screen...Is it on both recording and playback modes or just recording? If it is just on the recording mode, if you have 3CCD camcorder, one of the CCDs may have died. If you see this on every mode, one of the circuits could have fried.