Hello Folks,
The cause of the problem was the corruption of data during SPI communication.
It turns out that the LCD module is only compatible with a sub-set of SPI modes. Out of four possible SPI modes of operation, LCD module did not work at all with one, caused the problem described with another, and worked OK with other two SPI modes.
For this project a PIC24HJ series CPU was used and SPI was set to have CKP and CKE of opposite logic level. The SPI communication worked fine running at 3.3-MHz.
Thanks for your help.