I haven't heard of anybody else running into this problem, and my various dealings with video switching hasn't yielded anything similar either. It's odd that it only affects certain games (and even odder that it affects certain games on different consoles). I don't believe that Outlaw's working on it currently, but you might give them a call or open a support ticket to see if they can help work it out.

One thing that occurs to me is to try an s-video cable from each console (or even component, although the GameCube component output was apparently dropped and of course you may already have all of your component inputs hooked up to things). It doesn't address whatever oddness is going on with the composite input, but it would probably give you somewhat better video quality and would be an interesting test to see if it still yields any vertical hold problems.