I have a Toshiba HD-A2 run to my Pioneer VSX-33 via HDMI. When ever the Pioneer's video processing is enabled, the colors are way off (It looks like an old arcade game), when disabled, the colors are fine, but the picture compresses on my display to about half it's normal height.
Plug the player directly into the display and see if it behaves normally. Get it setup and the try with receiver with video processing disabled. Both units may be functioning properly but you just don't have the correct settings for either depending on whether video processing is enabled or not in receiver. I don't see any need for video processing in the receiver to be enabled.