Alright, so my previous POST was a temp. fix it seems. Once restarting the computer, installing updates, the issue would resurface..
Sorry it has taken awhile to get back.
I called Dell and talked to one of the reps who continually told me to just "Go back to Win7" cause that's what it shipped with and worked with. He was saying the 2320 may not be fully supported in windows 8. The support page say it works fine in windows 8 other than a TV Card and USB issue's (none of which are issue's with the machine I worked on)
Anyways. I Resolved the issue by going to Device Manager, opening up the Display Adapter, right clicking on the video card and going to Update Driver. From there you say you want to B"rowse My Computer for driver software".
On the next page, select "Let me pick from a list..." In there, you should hopefully have a few to pick from, the first one being the Windows 8 Basic Driver, the next 2 above that are Microsoft drivers. Choose the Microsoft one that has something in brackets after it "( )"
After installing the drivers, restart.. You should notice that the color flipping screen doesn't come up.
After this, go to Windows Updates, check for updates
An update should show up for the Intel Graphics drivers, Make sure to right click and hide it. If it updates it may cause the issue to resurface..
Hope this resolves the issue for anyone having this problem.