This is a side effect of some of the gaming features that may be enabled on your monitor. In the Picture Advanced menu, you will want to find two options: AMA and Instant Mode. Turn both of these off. These sacrifice image quality for speed. While these features are greatly appreciated by the pro gamers we sponsor, some users prefer image quality over speed. I am one of those users, as I'm not good enough to notice the speed difference :(
Once you have those two options disabled, you will want to adjust the Black Equalizer. This raises the black level to allow you to see campers hiding in corners, but has the side effect of washing out the image in normal use. This is one reason why its a good idea to have a Gamer mode, and then switch from that to Standard when not gaming. This allows you the best of both worlds, and is why we developed the S-Switch. It is remarkably useful.
If you change the settings listed above, or change the picture mode to Standard, it should resolve any pixelation or distortion of the image you are seeing. If this doesn't help, please feel free to post in the Q&A section or give us a call at 866.600.2367