So, I tried another BD player with a much shorter HDMI cable, still the same banding issue.
However, I also hooked my laptop up to the projector and started playing with photoshop. Granted I know it is a different color space, but it appears that depending on the settings, there are just some shades of grey that this projector treats differently.
The grays where the color gets weird change depending on the color settings, but I found that under my current settings (and whatever color profile my mac was putting out, who knows what that is), that R 248 G 248 B 248 had a noticeable blue cast where as R 247 G 247 B 247 and R 249 G 249 B 249 did not. (granted this is an RGB color space as opposed to YUV).
I found this particular point when I put a gradient on the screen, and then used the OSX digital color meter to see what color it was supposedly outputting at the point there was a darker band. Then I verified this behavior in Photoshop by creating overlayed bands stepping up by one from RGB 245, 245, 245 to RGB 249, 249, 249. The 248, 248, 248 band had a noticeable different color cast.
Also, for this, I had Briliant Color at 1 and Dynamic Black off. I wish I had an accurate meter to grab the color coming off of the screen, as I am not going to waste anyones time with whatever my cheap really old (and soon to be replaced, hopefully) Spyder 2 reads.