Pete,
I have this same problem. I am using the hvr-m25u with component output to a panasonic bt-lh2600w. Tape playback from the deck through the component connection displays fine on the monitor, so do color bars when they are generated by the deck. The issue is with a pass through signal and unlike what the last reply to your post said it has nothing to do with hdv output or hd anything. In my case the pass through works fine when I use an s-video connection like you mentioned, however the problem arises when I use component output with the firewire input even with an sd signal.
I spoke with sony’s pro support guys and they seem to think that the issue is aggregate instability in the signal by using firewire and component. I asked them if this was a hardware malfunction and they said no; that they do not guarantee pass through playback on these decks, only recording and playback of a recording. I was pretty pissed I have a 5000 dollar deck that can’t properly pass a signal through but in the end they are right and I am at a stand still with this issue.
Have you been able to make any progress with the issue?