Ok here's the scoop...
Talked to Panasonic Support, they claim it's my LCD that is not working correctly. Supposedly even when using HDMI my PAL DVDs shouldn't work and some of my DVDs are PAL.
They claim that they are strictly bound to the standards and evidently my LCD manufacturer isn't.
P.S. Somehow the fact that Olevia doesn't follow standards that closely truly works for me...