Edit: Figured it out. Plz Delete
Your PS2 has to be version SCPH5000 or newer to do progressive scan playback of DVDs. Maybe its an older version?
Mines actually SCPH75001
It can do progressive scan on my 42" LCD tv, so I know everything is okay with the PS2 itself, I’m more or less hoping someone can give me a clue as to WTF is going on with my TV…