The most likely cause is shorted convergence chips and possibly a few pico fuses.
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
Hitachi,Mitsubishi,Zenith and others.
You can get a convergenece repair kit with instructions from the links below.
Here are some of the most common problems with these sets...
Problem #1) Convergence
Yours may have one or more of the following symptoms...
*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
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 here