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I finally put my theater together about a year ago. I chose the Epson 9700UB and it is the only issue I have ran in to. I originally had these lines (most prominent in the attached image in the upper left corner) when I first used the Epson 9700. I then contacted Epson thinking they would give me some common misconfiguration I accidentally have, but instead they replaced the projector with a new one. The lines were sorta there but much much better... until earlier this month when they returned with a vengeance. Here is what I have done to troubleshoot the issue:

1.) Tried HDMI 1 (through the Pioneer Elite Receiver)
2.) Direct from laptop to projector with different HDMI cable on HDMI2.
3.) Zoom in/Zoom out the projector.. This seems to cause the lines to change. If I zoom in or out all the way they seem to go away. (Unfortunately I need to be about midway on the zoom distance).

Here is a little more about my setup.

I am using 120" acoustically transparent screen (Elite). The projector lens is 15' 1" from the screen.

How should I proceed with this? Is this just 2 bad projectors? Is this a problem with the marriage between the screen and projector?

Is this something I setup incorrectly here? Known issue?