Setting Contrast with Digital Projectors
I've had the same difficulty setting contrast and brightness with my Sharp DLP projector. This is the procedure I use. I think it's accurate and works well.
I use the Video Essentials disc. To set black level, I adjust the pluge test so the left darker than black bar just disappears into the background, and the lighter bar is just visible. Also, if you stand right up next to the screen. There is a point where the digital noise or dithering in the background just goes away, and 1 click up it comes back. I adjust the brightness so this artifact is just 1 click from being visible, and the left vertical stripe has disappeared into the background.
For the initial setting of contrast I use the AVIA disc and put up the crossed gray scale pattern. I adjust the contrast to the highest setting before the last 2 brightest whites don't bloom and merge together. I make my final adjustment by putting the Video Essentials disc back in and running "video montage of images." About 1/2 way thru the montage, there is a scene where a train comes across the screen from left to right in the lower 1/2 of the image. In the background, the sky is cloudy. In the right upper corner of the image, there is a small white oblong cloud that is just visible. I put that image on pause and tweak the contrast again until the cloud is visible (white cloud on grayish background) and not blooming. Usually there is just 1 click on the Sharp contrast setting that is perfect. Another scene that is good for this is the fish jumping up the small waterfall. There are some very bright reflections off the water that will bloom if the contrast is set too high. Hope these suggestions help, try 'em, you'll like 'em!