Display drivers constantly crashing, frequent BSOD - 0x00000116

I recently purchased an MSi Radeon R7 265, OC Edition. It was working flawlessly (playing Wildstar, Battlefield 3 and League of Legends) up until Saturday, when I was in the middle of playing Wildstar and my screen went black and gave me a BSOD, then automatically restarted my computer. Ever since that point, whenever I attempt to open basically any application, whether it be Firefox, Chrome or any sort of game, my screen will freeze up and go black, then come back on with a notification that my AMD display drivers stopped responding and were recovered successfully. I can't even access the Catalyst Control Center. Occasionally, if I don't leave the offending program in time, my computer will eventually give me BSOD 0x00000116, "an attempt to reset the display driver and recover from a timeout failed." This only occurs when the drivers are installed/enabled.

I've tried several different graphics drivers, including the ones on the CD, ones available to me on the MSi manufacturer's website, latest stable and beta drivers from AMD, and even previous versions of drivers. All with the same or similar effect. I've reinstalled fresh copies of Windows twice now, to no effect. It seems like the only programs that I CAN use without incident are the pre-installed copy of Internet Explorer that comes with Windows, and Steam -- but only Steam, no games.

I'm thinking that it's a bad GPU.

Code:

BugCheck 116, {fffffa8002fa14e0, fffff88003d06d88, 0, d}

0x116 errors aren't typical BSODs in the sense that they only occur because the graphics card hangs so Windows attempts to reset the display and fails within the allocated time interval.
This can occur by bad display drivers or faulty GPUs.

The first clue is that you've a lot drivers but nothing helps.

Code:

0: kd> u fffff88003d06d88
atikmpag+0xbd88:
fffff880`03d06d88 4883ec28        sub     rsp,28h
fffff880`03d06d8c 4c8bda          mov     r11,rdx
fffff880`03d06d8f 41ba010000c0    mov     r10d,0C0000001h
fffff880`03d06d95 4885c9          test    rcx,rcx
fffff880`03d06d98 742e            je      atikmpag+0xbdc8 (fffff880`03d06dc8)
fffff880`03d06d9a 4885d2          test    rdx,rdx
fffff880`03d06d9d 7429            je      atikmpag+0xbdc8 (fffff880`03d06dc8)
fffff880`03d06d9f e8b4340000      call    atikmpag+0xf258 (fffff880`03d0a258)

The other clue is the error code which is null, this means the last operation was successful.

Stress test your graphics card with Furmark

I recommend running it for around 30 minutes

   Warning

Furmark will increase the temperature of your GPU rapidly so keep and eye on your temperatures

What temperature should it be? Five minutes in and it is at 74 Celcius and rising very slowly.

74 degrees is pretty good, mine never exceeds 80.

The max temperature varies from card to card but I would say anywhere above 90C.

After 15 minutes, the test finally leveled off for a good 4 to 5 minutes around 77 Celcius, so I stopped it when it levelled off. Honestly, with all the driver crashes and whatnot I've been having lately, I was surprised to see something that resembled graphics actually work on my computer. What now?

I'm curious, could the fact that it's pre-overclocked have anything to do with it? I have a feeling that it might affecting my power supply, processor or RAM. I've never overclocked anything before, let alone had anything pre-overclocked, so I'm not sure what the effects might be on aging hardware like my underwhelming processor.

Ok, lets try changing display versions.

Code:

0: kd> lmvm atikmdag
start             end                 module name
fffff880`1306c000 fffff880`13d5c000   atikmdag   (deferred)             
    Image path: \SystemRoot\system32\DRIVERS\atikmdag.sys
    Image name: atikmdag.sys
    Timestamp:        Fri Dec 06 21:19:43 2013 (52A23F6F)
    CheckSum:         00CA856E
    ImageSize:        00CF0000
    Translations:     0000.04b0 0000.04e4 0409.04b0 0409.04e4

Try rolling back the driver a bit.

Also, as a test remove this program.

Code:

Advanced SystemCare 7	"c:\program files (x86)\iobit\advanced systemcare 7\asctray.exe" /auto	Cody-PC\Cody	HKU\S-1-5-21-2513105136-2758544290-1301030646-1000\SOFTWARE\Microsoft\Windows\CurrentVersion\Run

It's a bit iffy, sometimes it works other times it causes issues, I would remove it as a test.