Is it possible that your 7800 unit is PAL and not NTSC? The display problem you're describing sounds somewhat like the kind of thing one gets when going from one signal type to the other. Granted this is a longshot, but it's worth asking nonetheless.

Second option - since you've already opened it up - would be to look for an adjustment pot somewhere around the RF box. It's probably orange in color. Put a screwdriver in there and see if you improve anything.