One of the main disadvantages of many people's projectors is the "too dark" black crush problem. Most if not all transcoders and video processors take the 16-235 color scale from YPbPr component and convert it to the 0-255 color scale for VGA.

One day I hooked up my HD tuner via DVI directly to the projector rather than use component out via a transcoder. The DVI of the tuner outputs a 16-235 colorspace - no black crush at all! Everything looks perfect! Upon further research into the 2 colorspaces, sure enough, a black crushed 0-255 image will usually look fine using the 16-235 colorspace.

I did some research and found some interesting info regarding transcoder design and the conversion from the 16-235 video colorspace (what DVDs and games are coded in) and the 0-255 colorspace (what PCs use).

With the DIY transcoder, I believe merely changing the values of a few resistors prior to the op-amp will allow the transcoder to output a 16-235 colorspace, eliminating any black crush problems.

The only problem is, I have not had any luck figuring out how the various formulas and constants are used to calculate the original resistor values.

If we put our heads together, I bet we can figure out exactly how these resistor values are calculated, and make necessary changes.

Here are some info links:
http://elm-chan.org/works/yuv2rgb/report.html

http://www.stevegehlbach.com/drupal/?q=article/opamp_html

http://www.ilkeratalay.com/colorspacesfaq.php

Table 3 in the PDF gives important constants for converting between the 2 colorspaces:
colorspace PDF

It not only causes black crush, but grey white levels, and washed out colors.

In theory you are right about the white levels, but when observed they were not bad at all.
Remember, this all depends on the monitor. If the monitor displays everything perfectly with the 0-255 levels, then yes, 16-235 would produce washed out colors. But, if your monitor is causing crushed blacks, then more than likely inputting the 16-235 color scale will improve the image dramatically.

It is often highly recomended to change the software codec to output 16-235 levels when playing video on a PC that appears too dark. I'm trying to do the same thing, but with hardware instead.

Any progress on this? It is an interesting topic to me, but don't have the means to attack it myself.

Unfortunately, no. I posted the same question on AVSforum, directed to the transcoder designers there, and nobody replied.

Most of what you are looking for is here:
http://www.avsforum.com/avs-vb/showthread.php?t=523614