Seems like nec is probably pointing you in the right direction. You didn't say if your display couldn't handle 1080p, but since the converter can, and the player is set on auto, it's probably using 1080p. I'd first try taking the player to another HDMI TV (if you don't have one, surely your neighbor does), and manually forcing the HDMI setup to 1080i.
Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime