Thats into a voodoo area I don't know much about. When I had Dish "TurboHD", there were 3 cables running from the dish to some sort of combiner box (3 lnb on the dish), and then one cable from there to the receiver.
I don't know if all three cables made it HD, or if one cable carried HD and one carried SD, or whatever
I can't see your cabling being the cause of the picture issue - it's a digital signal from the bird, either you receive it or you don't. are all your sd channels doing this, or just "the game"?
as I recall DSS uses mpeg compression, so some lost packets will cause blocks to appear in the picture, big blocks for sd, small blocks for hd... but faded colors and other analog artifacts, sounds like a connection problem between the receiver and the tv, or the tv itself??? what kind of connection are you using from the receiver to the tv?