Onkyo SR304.. awful video quality using 2 component inputs

Alright guys, here is my issue.


This week, I picked up a new receiver (Onkyo sr304 from CC), speakers (polk rm 6750), and new cables to get a much better av experience. my crappy old home theater in a box just wasn't cutting it anymore.


Anyways, I hooked everything up yesterday night and to my dismay, I have found out that the video quality using "Video 1" and "Video 2" are absolutely horrid. There are green lines flashing all across the screen and the video is terrible.


I have my cable box set up to the "DVD in" and the picture is perfect. However, my 360 and PS3 are hooked up to "Video 1" and "Video 2" respectively. When I hook up my 360 to "DVD in", the video quality is perfect. Its not distorted and generally TERRIBLE like it was with "Video 1"


Now I would hook up the video components directly to the tv, but there are two problems: 1. TV only has two sets of video components and 2. my ps3 audio cables are "short." There is not enough slack to have the ps3 audio cables reach from the tv component inputs to the receiver audio inputs.


So this brings me to my situation right now.


Should I call Onkyo tech support and have them wish wash me through everything only to make me send the unit in for repair


OR


Should I just bring the damn thing back to circuit city and have them exchange it.


Thanks guys (btw I'm a newbie if you couldn't tell, go easy on me please lol)