Personally I always recommend using the smallest possible splitter. As a test I would connect one of the receivers directly to the SWM1 output and the other to the SWM2 output (as you currently don't need more than two receivers anyway) and see if your pixelation issues are resolved. If not you may have a defective SWM.
I'm not sure what you would consider a long cable run but, even though you "should" get good performance over 250' of cable after passing through an 8-way splitter, I've personally seen problems with runs as "short" as 150'.
I'm not sure what you would consider a long cable run but, even though you "should" get good performance over 250' of cable after passing through an 8-way splitter, I've personally seen problems with runs as "short" as 150'.