Top 1/4 and bottom 1/8 of the Screenhas Disappeared and is wavy, but it sound great.

You have either the circuit board that drives that half of the screen(one for top and another for the bottom) or you have a bad display panel.

sounds like the auto convergence option has disappeared from the set up menu. Press menu and scroll to setup and then enter setup menu and see if the auto convergence is still listed there or has it disappeared?

Projection sets have two very common problems.

The first common problem is convergence

These sets need to have all three colors - RED - BLUE - GREEN - lined up correctly on the screen in order for the picture to look normal. This is called convergence.

When its out of alignment the video will look 3-D, wavy, distorted, etc. Most of the time you just need to adjust your convergence in the menu. If you cannot adjust it in the menu - then your convergence is broken and needs to be repaired. Convergence problems are very common on all Projection TV sets including Sony, Samsung,JVC,Philip Magnavox,Panasonic,Akai,Pioneer, Hitachi,Mitsubishi,Zenith and others.
You can get more information and a DIY convergenece repair kit with instructions from the link below.

Here are some of the most common problems with these sets...

*Screen Looks 3-D
*Colors wont align
*Screen may look distorted or warped or bowed
*No Audio/Video - TV Shuts down - May also make a constant chirping sound

Problem #2 - Another common problem is dull or washed out video.

Your set may have one or more of the following symptoms....

*Dull looking picture
*White looking picture
*Halos around objects
*Red/Orange looking picture

You can see some more examples and find a fix using this link on Fixya http://www.fixya.com/support/r2861467-solution_video_looking_whiteish_dull

Projection TV sets have two very common problems listed below.

Problem #1) Convergence


These sets need to have all three colors - RED - BLUE - GREEN - lined up correctly on the screen in order for the picture to look normal. This is called convergence.

When its out of alignment the video will look 3-D, wavy, distorted, etc. Most of the time you just need to adjust your convergence in the menu. If you cannot adjust it in the menu - then your convergence is broken and needs to be repaired. Convergence problems are very common on all Projection TV sets including Sony, Samsung,JVC,Philip Magnavox,Panasonic,Akai,Pioneer, Hitachi,Mitsubishi,Zenith and others.
You can get more information and a DIY convergenece repair kit with instructions from the link below.

Here are some of the most common problems with these sets...

*Screen Looks 3-D
*Colors wont align
*Screen may look distorted or warped
*No Audio/Video - TV Shuts down - May also make a constant chirping sound

Problem #2 - Another common problem is dull or washed out video.

Your set may have one or more of the following symptoms....

*Dull looking picture
*White looking picture
*Halos around objects
*Red/Orange looking picture

You can see some more examples and find a fix using this link on Fixya http://www.fixya.com/support/r2861467-solution_video_looking_whiteish_dull

From the manual...

"If you forget your password, simultaneously press and hold MENU on the television and volume down on the remote for 3 seconds...Nothing appears on the screen, Parental Controls simply unlock and you can re-enter a password via Lock Parental Controls."

Hope this helps.

You have vertical output problems.There is distortion at the top because of a faulty vert. output i.c. or a faulty electrolytic capacitor.It's possible there may be a problem at your yoke also.It needs a professional repair.

Try moving a medium powered magnet (not one for picking up heavy objects and not a refrigerator holding one) over the distorted area. If that doesn't work, try a more powerful one. This worked for my Toshiba LCD. Good luck!

Replace the scan drive board also called X-sustain board. This is the board on the upper left side in the back of the set with a huge heat sink on it. you can find them online for about 175.00. The p/n is pkg50c2g1. Be carefull with the 4 ribbon connectors that go to the display.

Convergence amp ic bad
http://home.earthlink.net/~oleg.filippov/ConvergenceFix.htm
http://cmpalmer.blogspot.com/2006/11/fixing-my-own-tv-part-ii.html
Sony Convergence
http://www.techlore.com/blog/entry/19694/Sony-Convergence-Repair-My-Sony-TV-has-a-distorted-picture-/
http://www.techlore.com/article/19631/Sony-Convergence-Procedure/

Usually when the vertical starts shrinking slowly, it is due to capicators getting out of tolerance in the vertical output section of the chassis. If it can be adjusted out through a service menu, you'll probably need a tech with the right equipment to perform it.