UPDATE: VholdR said the pink lines normal (lens flares) were, and I have a 3rd party threaded adapter purchase and a polarized lens. They also claimed that the pink color was not the result of a defect, and that I play with the exposure. I did it, and nothing has helped. I have the Contour back and got a gopro HD. Styling aside, the gopro simply a much better camera. I am very happy with it.
http://www.youtube.com/watch?v=kusaWaNf9yU&hl=en