Update: Received new HR10-250 (not refurb like I thought) and have changed out with previous receiver. Results exactly the same.
I am now convinced that bad PQ is a result of D* equipment. I am now going to purchase and reinstall a Sony SatHD300 receiver and have both on same TV so I can compare apples to apples, then if as I expect the sony is better PQ then I am going to try and send the 250 back and get out of contract. we'll see.
Go through the setup on the hr10-250 and check off all the different resolutions, then the rvr will give you the option of outputting in native format. This should help, because if you have 1080i as your output the SD channels will be converted and you end up with a picture that is crap-ville.