Hardware or Driver issue?

Hi, I'm having problems with my almost 3 years old Sager np8130. I'm sorry for posting here, but i really dont know where to ask. My laptop was doing fine for 2 years, until a few months ago i received an "nvidia display kernel driver..." error. I only received it once back then, so i thought it was all good. But recently, it happens more frequently than before. It came to a point that whenever i play games like DOtA 2 or even just Frozen Throne, I will get that error while im still at the loading screen and it happens every time. Now i cant even play games anymore, since my laptop would just freeze and reset it manually. My laptops specs is:

Intel i7-2760m
Nvidia Gtx 560m
8gb ram
500gb HDD

I have no other problems when doing other stuffs like browsing the internet or watching HD movies. I've searched the web a lot and tried all the solutions i saw just to fix my laptop, but no luck at all. These are the solutions i've tried to fix my laptop:

-Uninstalling nvidia drivers, removed everything including registry entries. Clean install of drivers from old to latest drivers.
-Formatted my laptop and did a clean install of Windows 7 SP1, then reinstalled the same drivers i used before when my laptop still doesnt get that error.
-Tried the TRD solutions.
-I also uninstalled my Nvidia audio drivers since they say it might have conflict with my Realtek Drivers and Vice-versa.
-Changed the nvidia power management mode to maximum performance, even my laptop power plan settings is on high performance (using Tune-up Utilities 2014)
-Cleaned my laptop fans, re-applying thermal paste on gpu
-monitored my temps, cpu idle temp is on 50 °C goes as high as 93 °C and gpu idle temp at 45 °C goes as high as 87 °C (i was able to check this temps using GPU-z and Coretemp while running Furmark, 3d mark Vantage, MSI Kombustor)

After doing all these, Im still getting the same driver error. Which ever driver version i use, the problem still occurs. Whats weird is, while running GPU stress tests like Furmark, 3d mark Vantage and MSI Kombustor my display driver didnt crash even if the GPU is on 99% load and is on 87 °C. It only crashes when i run games, even if the temps and load are not that high compared when running stress tests. My temporary fix for now is underclocking my Graphics card by -100. I can feel my laptop is slower since im getting lower FPS because of underclocking.

I've really tried everthing i saw in the internet to fix my laptop, im kinda desperate now. I saw in a thread that desktop computers get this error too when their PSU is failing, can this happen to laptops too?

Please help me, thank you.

 

From your post it seems more likely that the card is the problem, as opposed to your PSU. As furmark etc is running fine ( DO not use furmark, its terrible for your card). Nonetheless it shouldnt be your PSU since they are running fine and your getting the errors even in Frozen throne which wouldnt push the PSU.

Since you already did a repaste, did you also inspect the mxm board? Sorry I do not know exactly what is wrong with your notebok either as the benchmarks should have come up with the same error since at least once.

Could just be due to silicon degradation though.