Afro2cool,
I've got a 5990 and I had to make a couple of changes in my setup after running everything through the receiver.
I began using the receiver's upconversion to convert my DVD output to progressive scan, so I'm now taking the interlaced output from my player.
I also has to recalibrate the TV (just normal brightness, contrast, color, tint and sharpness). I recommend going back to flat settings on your DVD, if you aren't already setup that way.
I noticed the output coming from the receiver, as compared to taking output directly from the DVD, is MUCH brighter. That is very likely the root cause of the problem you're seeing.
Now, I'm very satisfied with the image. I was also glad to see that the Yamaha did NOT interfere with my DVD's ability to pass blacker than black.