I think you can capture what you stream on the 515. Not sure of best method, but anything the Sony player "understands" and plays to the TV should be recordable on the 515.
If the Sony has composite or S-Video out, that should work as an input to the 515. If you want to or need to use HDMI out from the Sony, since the 515 doesn't have HDMI input, you could try an HDMI converter described here?
L2 is set to "Video In" Also, Progressive Scan-OFF; fun Link changed to OFF. Still same issue. Received this same error message: "Video cannot be output from this jack. View/Listen using HDMI connected device." Is this implying that only HDMI from the Sony BD can be used? What else should I try?