Home theater projector (sanyo-z2), having trouble with dark and light areas.?

My projector (sanyo-z2) performs very badly with any very dark or light areas in scenes. Dark areas just become a mess of completely black pixels, and very light areas just go totally white with NO detail whatsoever. This seems to be even more of a problem with dark than light scenes, in fact, almost every scene of every movie is ruined by the dark areas of the image going totally black, and the black pixels are clearly visible and visually separated from the rest of the image (the dont ‘blend’, not surprising as the pixels are discrete units after all). There seems to be nothing i can do about this, though if i turn up the brightness on my dvd player (a toshiba hd-362), the dark scenes get better and the light scenes get blown out instead. Could this be a problem with the dvd player? or is it the projector? anything i can do??

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