Problems with Pioneer SC-LX81

Hi everyone

I am having problems with my Pioneer SC-LX81. Firstly, all of my components are HDMI into AVR with single output to the Kuro.I have the new ATV and am running it through the AVR. Whenever I set the output to 1080p I get snow on screen with a very faint picture in the back ground. My TV is a Pioneer Kuro 50inch (purchased just before they stopped production). I am having the exact same problem with my Blu Ray player which is Pioneer BDP-140. If i set this to auto it will bring the welcome/menu screen up fine in 720. But in 1080p the output is exactly the same as with the ATV. But pressing play and playing the blu ray movie in 1080p is fine and the picture on screen is perfect. It's only when the menu is on screen that the snow/static appears.  I have tried turning off video conversion in the AVR but as it is connected HDMI it is not allowing me the option to change anything.  I have tried both the ATV and BDP upstairs on my Panasonic and both work fine running directly to the TV. 

My thinking is that maybe the AVR is not compatible with HDMI 1.4 and this is causing the problem.It is a 2008 model. The only other equipment I'm running through the AVR is Sky HD 1TB (sound via optical) and PS3 mk1. 

Any thoughts on what may be the cause or any solutions would be greatly appreciated. 

As a side note. I have a demo arranged with the Arcam AVR-360 where I will be taking my BDP with me. 

Thanks.