Curiously, the pic itself isn't distorted, no "fat faces" or anything like that, right? Because the first thing I think of is AR settings in the PJ. But then really, my real guess is that you're simply limited by the PJ's zoom. I would contact Sharp directly, if I were you, trying my best to find someone who actually knows a thing or two about their PJs. DLPs are renowned for extremely* limited PJ placement (in regards to desired screen placement and size, of course).
How do you know 122" should be allowed? The manual itself says so? Again, I'd try contacting Sharp.
My friend had an issue with a new JVC he had for a while but just recently fired up. To his happy surprise, the nearest repair center was within driving distance. You never know I guess.