Blurry image when "HDMI Support" Data Block is enabled

This is a years old problem that I have, and only now found the incentive to dig deeper and attempt to solve.

I have a GA-MA78GM-SH2 motherboard, with ATI 3200 onboard GPU. It is connected to a Samsung Plasma TV (PS42A450) by HDMI cable. In BIOS it is possible to configure the output to be either DSUB/HDMI, or DSUB/DVI. When HDMI mode is selected, audio is delivered to the screen and Windows shows that the HDMI audio device is plugged in and working. When DVI mode is selected, audio is not working - as expected. Of course in both settings I'm using the same HDMI cable.

The problem is that when using the HDMI setting, the image is a bit blurry. Whereas in DVI mode it is razor sharp.
I double and triple checked that the problem is not in the TV's setting and I can almost 100% guarantee that it is not the TV's fault.

Upon diving a bit deeper with CRU, I noticed that I can get sharp image in HDMI mode as well, as long as the extension block does NOT contain the "HDMI Support" Data Block. But, that also disables audio and Windows shows the HDMI Audio Device as unplugged. Once this Data Block is added, no matter what settings inside it I tried, the image becomes blurry, but I get audio back...

I would really appreciate any help.
Thanks!