Progressive Denon DVD problem - help me solve this

hi-
i have a pioneer elite pro 520 and just bought a denon dvd-2800 brand new. here's the problem - the picture sucks! I have the component cables hooked up and the tv tells me it's scanning at 31k - the progressive rate. i have the dvd player set to progressive scan, but the little progressive indicator isn't coming on for any of the five discs i've tried. also, the pioneer has five different viewing settings, none of which look any good. the "full" setting is really grey, poor blacks. the cinema wide is decent blacks, but cuts off the top and bottom of the picture. oh and the full setting keeps black bars on the top and bottom, even tho i have the aspect ratio at 16:9 on the dvd player. my piece of crap $100 old rca dvd player gave me a much better picture on s-video, so what gives? can't figure this out. oh, and the picture quality overall is really bad - worse than my satellite picture - grainy, poor detail, muddled colors... what gives? tried switching cables, inputs, everything... anyone have any ideas?? -baz