I may have some help for you on this. I bought an SMS in a lot from a guy on Craig's List a couple of months back and had a very similar issue. The colors were oversaturated and the video just looked like sh*t. I took some pics (below) and I was going to post them in the forum and ask for some help but I did some internet digging first to see if this was a common problem. I found a single YouTube video that was of some help (
(skip to 9:00)) I flipped the board over and noticed some problems.

- PB010011a.jpg (290.04 KiB) Viewed 617 times
There seems to be some deterioration and it's possible someone had jacked up some resoldering in the past. There are some awful looking joints here. At the time I had a soldering iron but didn't know anything about how to solder/desolder but since I had another SMS I decided to see what I could do on my own. There was a joint that seemed to be deteriorated/poorly soldered. I added some solder to reconnect the joint at it actually fixed the problem. I hadn't looked at the board since I "fixed" it and even my resolder looks like sh*t but everything seems to work fine. I have gotten significantly better at soldering and diagnosing issues since and fixed a bunch of broken consoles I had lying around. I'm going to have to do some more work on this now that I have an idea of what I'm doing. I don't know if you have any experience with soldering but I had never done anything prior to this so if a loose joint is the problem, even as a novice I'm sure you can fix it without too much trouble. Please note I got the same results on a CRT and HDTV.
Before:

- P9150001ab.jpg (311.62 KiB) Viewed 617 times

- P9150010a.jpg (196.17 KiB) Viewed 617 times
After:

- P9150011a.jpg (198.95 KiB) Viewed 617 times
If you can't identify the problem post some clear pics and I'll see if I can help.