That sounds less than pleasant. It's not a problem I've seen.

Most of the iBook display problems not directly related to the GPU typically have something to do with a worn cable, or a bad display component. Since the light flickers for a second, it's probably not the cable. If you've got a spare, try swapping over a different screen and see if the new one works.

There are a few Open Firmware tricks out there that may affect your backlighting if done improperly. One example would be the display spanning hack.