Yeah, I agree - something is causing the 1070 to have a problem with the source signal. Is the scrolling slow enough to see if the OSD is being overlayed onto the source before the vertical hold is lost, or are the OSD and source both scrolling separately? I'm guessing from your description that it's the former, which may help Outlaw figure out where in the video signal path things are going awry.

Another question: is the video input set to "Composite" or "Auto" in the 1070's menus? You might try changing that setting to see if that makes any difference.