Why do flatscreen/LCD monitors display random colours and bizzare shapes or patterns upon being cracked?
Like others have mentioned, it can be the glass breaking and causing rainbows (from diffraction). You asked specially about Liquid Crystal Displays, the liquid can flow around when the display is (more accurately, the pixels are) broken.
“Flatscreen” is a physical shape and not a method of building a display – these can have many methods. LCD is one type, the others will have different reasons for weird behaviors when they break.
The LCD panel in your monitor has way more electronics on it than just liquid crystals! The circuits to control the pixels are etched into the panel too, along with millions of wires to connect everything together. These are so small that you don’t even notice them.
When you crack the display, some of these wires and circuits are broken. Some areas are partially damaged – for instance, the red pixels may be destroyed but the green and blue still work fine. Other areas might have power but no signal – these areas turn random colors because the pixels interpret random noise as commands from the system.
The way the engineers distribute the wires, pixels, and drivers on the panel influence what happens when it breaks. Usually, pixels and other parts are connected in lines or rectangles. When you crack the panel, the entire line or block fails together.
It’s also possible for the cable that connects the panel to the device to break, or the circuit that translates images into instructions to fail. These are the coolest-looking failures, because the panel is still working, but the data are damaged! When this happens, colors can get all mixed up, weird sparkly fringes can appear around details, different pictures can blend together, and more.
The shapes are due to the pattern of cracks in the glass. The colors are due to the signals going to the wrong place or missing from where they belong. For the screen to display the correct color, everything must be connected and working properly.