I had some ongoing issues with my PS3 and my new Denon 3312ci I bought last summer, in that the PS3 would not output 1080p video when connected directly to the HDMI input of the Denon. Well, I am sure it was outputting it just fine, but the picture would go crazy and appear scrambled and even blink on and off. EVery other resolution output was fine, all the way up to 1080i, so that's what I lived with til now.
I thought it wasn't the PS3s output because if I plugged the HDMI directly into my Samsung TV, it displayed 1080p without a hitch. So I assumed the problem was with the Denon, but could not understand why when it is such a newer unit and supports all the video formats? I almost hooked up an Ethernet cable to do a firmware update, but figured that would be a last resort since the unit was so new.
Yeah, I know I could've hooked up the HDMI separately and ran an optical cable to the Denon for audio only, but after spending almost $100 on an Audioquest Cinnamon cable I just didn't feel I needed to compromise... OK I'm stubborn too.
Turns out there is a setting in the PS3 Video menu called Deep Color Output, which is defaulted to automatic. Switching that to "off" took care of the problem immediately, just a little bent that it took me so long to straighten that out. And I can't take credit for coming up with the fix, I actually found a whole section on the AVS Forum dedicated to Denon owners.