trs-80 model II trouble

I just received a trs-80 model II over the weekend :-) I have never used a model II before. It looks like there is some kind of problem...here are the symptoms: When I turn it on, the screen is all inverse exclamation points "!". It says "INSEST!DISKEUTE" When I close the diskette door, the exclamation points turn non-inverse but still cover the screen. It when boots (in this case I am booting a cpm disk). The letters seem jumbled up...after booting, I see: "CQ/MQ!for!tss-81 MOEM II 63k!Version!2/25A Copyrigit!(c)!1981 Migecoat Associaues" And it goes to a command prompt. The rest of the screen is still filled with exclamation points. The system does respond as I type things, but letters are garbled. Any ideas? Does this sound like some bad memory? How can I diagnose this? Thanks! -Bob