Wow, your photo is scarry. I think you should take further investigation into your camara body.
While most of the replies point out that phenomenon of yellow light running horizontally across yout photo is casued by the 60HZ interior lights; I would however hold on to different opinion. If what they say is true then something is very wrong with their logic.
You said yourself, this phenomenon stays consistant until you have set your ISO under or less than 3200. Check your shutter speed which I strongly believe that you would still get shutter speed faster than at least 1/80s (which is still faster than 1/60s).
Assuming you were using a lens with aperture size of f2.8 or larger, I quickly tested my 550D+Sigma 50mmF1.4 with ISO 6400 and ISO 3200 with shutter speed faster than 1/1250s. Well, guess waht? Nothing happened to my photo both on my 550D screen and on my notebook TFT screen.
In addtion, those who claims shutter speed of 1/60s is adequately sufficient for indoor photographic sessions, I strongly doubt that they were talking about static shooting not fast moving objects like kids running across the room. I find myself taking pictures of my kids less than 2 years old requires at least 1/80s to freeze their action on photo. For that kind of shutter speed I would need to set my ISO at 1600 or above.
I think you should waste no more of your time discussing your problem with your 7D here on Mobile01. You should take your camara to your dealer and demand a professional explanation. If possible, ask them to use another camara body and use the same setting you have problem with to resconstruct the scenario again and see if that yellow light shows on their 7D too.
I live in Taichung and have some nice experience with Canon Taichung. Although they do not fix camara on site and only can ship it to Taipei for service, they do actually test your camara (if they have time) and see if the camara body actually needs to be repaired. If they tested your camara and recommand you to leave your camara to them to ship to Taipei, then your 7D have a good chance of something wrong.
If you live in Taipei or Kaoshung, then you should take your camara to Canon ( or Rainbow?) and see what they say about your 7D's problem.