I too flashed my N800 with the flasher app using my Powerbook. No problem at all. The flasher name implies that it is a 770-only app but it worked fine on my Mac. Just follow the directions to a T.
Perhaps this is where I should start. I bought a "used" N800. It still had the screen protector on it, and the accessories were still in their wrapping. The guy wanted something like an iphone, and realized it is not a phone(in the conventional sense).
This was Tuesday of this week. Wednesday night I found the flasher app and reflashed it with the updated firmware. The screen is all screwy (snowy lines and boxes, desktop image shifted to the right on top of a faded desktop) when I turn it on, or wake it up. It does not last long <30 seconds and it clears up and works fine. I reflashed it again yesterday but it has the same problems.
Okay. I reflashed to an older version, and then to the most recent version of the firmware using the shell. I still have the screen problem. I guess I will have to ask elsewhere.
I've upgraded my N800 a couple of times, and never had the screen problem you describe. It sounds like a hardware problem. You might want to contact Nokia support.