strange animation - what is happening to the machine?

nintendo-ds.s

.arm
.align
.global initSystem
.global main

initSystem:
    bx lr

main:
    mov r0,#0x04000000      @ I/O space offset
    mov r1,#0x3             @ Both screens on
    mov r2,#0x00020000      @ Framebuffer mode
    mov r3,#0x80            @ VRAM bank A enabled, LCD - bit 8 on 
   
    str r1,[r0, #0x304]     @ Set POWERCNT  # couldn't find reference to this in gbatek
    str r2,[r0]             @     DISPCNT   #
    str r3,[r0, #0x240]     @     VRAMCNT_A #

    mov r0, #0x06800000     @ VRAM offset
    mov r1, #0x00           @ Writing pixel value
    mov r2, #0xffffff       @ number of pxels
    mov r3, #0x200
lp: strh r1, [r0], #128       @ Write a pixel in - increment r0 by #128
    subs r3,   r3, #1          @ decrement r2 - update flags
    beq next_color
    subs r2,   r2, #1          @ decrement r2 - update flags
    bne lp                  @ branch if not equal (is it checking the flags??)
next_color:
    mov  r1, r2
    mov r3, #0x204
    subs r2,   r2, #1          @ decrement r2 - update flags
    bne lp                  @ branch if not equal (is it checking the flags??)

nf: b nf                    @ Sit in an infinite loop to finish