It looks to me that you have either your player, or more likely your TV set to some sort of cinema mode. It's basically overscanning, taking the picture and expanding it all around to give you the correct aspect ratio, but filling the whole screen. This is used when you want no black bars anywhere on the screen, but you do not want the aspect ratio distorted in any way. You usually lose edges all around.

You need to check your player's manual and your TV's setting to see if you can get it into a standard "wide" mode. Normally on TV's there will be a button that will allow you to jump through the different screen modes to see what the picture looks like. Make sure your player is set to be outputting to a widescreen TV, and not anything else.

That picture is barely cropped compared to the "flag" problem where 16:9 was being shown as 4:3 and then stretched out. I think this is not a related issue. In fact the frame around your TV's CRT tube looks a lot bigger that the one around your LCD. Given that the viewable screen is larger on the LCD, and you lose viewable screen on CRT's is it possible that you just can't see as much on the TV? If it was the aspect ratio problem, you would just be able to see the "G" on the left and the "T" on the right.