Pioneer DV585 DVD player causing flicker? 'Nightmare Before Christmas' owners HELP!

I have a Panasonic TX32LXD52 connected via component to a Pioneer DV585 DVD player set to progressive scan. The Pioneer is set to output NTSC as NTSC and PAL as PAL.

During slow pans, most noticeably on R1 discs there is flicker on some details (usually bright highlights).
A particularly good example of this is on the R1 Nightmare Before Christmas Special Edition, during Chapter 3 ('Jack's Lament' where Jack walks through the graveyard). The ground is textured black and white, and flickers horribly during the panning shots. I also noticed the same thing on 'Walk The Line' R1.

I can almost completely eliminate the flicker by setting the sharpness of my TV to 0, but this is below the default setting and softens the image, totally ruining the quality. Increasing the sharpness makes the effect much worse.

I'm beginning to wonder if the Pioneer 585 is good enough to use on a 32" LCD. I upgraded the firmware, but to no avail. None of the settings on TV or DVD make any difference. Interlaced output is just as bad.
I tried the discs in my laptop, and although there was *very* slight flicker, it was barely noticable, making me suspect the Pioneer 585 even more.

Can anyone who has The Nightmare Before Christmas R1 Special Edition give it a go for me and see if the problem is there? I'm especially interested if you have a Panasonic TX32LXD52 or Pioneer DV585A.

I'm going to try and borrow a friends DVD player to see if the problem is present on that.

Questions:
1. Is my DVD player good enough for my LCD?
2. Is the TV at fault?
3. Is the DVD player at fault?

Thanks in advance.
Phil