[quote name='PenguinMaster']Reference levels cause sharper colors if you're TV/Monitor can support it. I'm using expanded and it looks great.
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Apparently, in the new update they fixed the problem with black over vga.
"Often the object of criticism for "washed out" finishes to images, the Xbox 360 rendered images in a slightly less vibrant manner that even average digital cameras were capable of on small LCD screens. The culprit was the technical divide on how the LDC TV and LCD monitor interprets black levels. LCD TVs define the color black on a level of 7.5 IRE when properly calibrated. In contrast the LCD monitor, commonly used for computers, labels black as completely black, with a zero level. LCD TVs also inherited that property when accepting signals through the VGA port, since manufacturers believed that the VGA port would usually be connected to PCs. So while connected through VGA, the Xbox 360 still sends signals appropriate for the 7.5 IRE level of black, instead of zero. This tells the LCD that the color isn't actually black, but a lighter shade of grey. Thanks to the Spring Update, however, Xbox 360 owners have access to an IRE tweak feature that allows them to set the black level either to 7.5 IRE, zero IRE or and IRE level in-between. The modes are Standard (zero), Intermediate and Expanded (7.5) modes are the only three modes that encompass a viewers range of options, although we believe once you go expanded, you won't be going back to standard. Comparison images brought you by Daily Tech."
How do I know if my LCD supports the Expanded mode? Is there any harm in running in that mode to see if it works?
^Sorry for getting off topic, OP. I tried to replicate your problem but could not.