I also noticed this problem when using my VCR. The VCR is connected to the 1070 via a composite cable (Video 1 input). The 1070 is connected to my TV (approx. 12 year old 32" JVC tube) via an S-Video cable. If the video signal goes through the 1070 and gets transcoded to S-Video the vertical scrolling is always off.

I also happen to have one of these video game devices:
Namco Arcade Game
which also caues the problem when connected to the 1070 via the front composite inputs (I haven't tried the back but suspect it wouldn't make any difference). Pssst...Outlaws, this might be a cheap way to try and diagnose the problem