[gandley]

Macroblocking can not be fixed as its an issue with the stated faroudja chip.
It can be tweaked out a little by calibrating your settings but its not something a firmware update will cure as its a hardware limitation.

If its macroblocking your seeing it will appear like a batch of dancing blocks.
Don't confuse it with poorly mastered discs that also show up true macroblocking which in its real terms is an encoding error.
Macroblocking tends to be most noticeable in low light scenes or dark areas of picture.

First step would be to make sure all noise reduction settings are turned to off and that sharpness is backed off(these will only enhance macroblocking further). To make sure its macroblocking turn the dvd players progscan mode off. if its macro blocking and not a disc error then the blocks should now be gone as the faroudja chip is now bypassed(you need to check this with the component out)
This is worth doing as you may be supprised how many times what you think is faroudja MB is realy disc MB.