Sounds like you're seeing the video driver bugs in Yosemite.
You can turn off GPU drawing in Photoshop's preferences, then restart the app and you should be able to get some work done.
But if you need the GPU features, then you're better off going back to a more stable version of MacOS.
tx Chris, I left "Use Graphics Processor" on and only unchecked "Use GP to accelerate computation" under the advanced tab and it seems to be working now.
I'm honestly not sure how the GPU will help me in my day to day, I'll keep it off like this (unless you have a better suggestion as to how to optimize the settings) and see if I notice any performance degradation.