sadly it is the cables. I have had it happen to quite a few clients of mine that anywhere from a BV7-55 to BS3 that have the problem. make sure they are 1.4v HDMI cables. This issue is an actual Apple issue though. It started hapening with their last update. 

I guess you will find some answers here:

You might be right about DRM. I think it is a part of the HDCP code in the BS3 that is malfunctioning. I believe they have added a larger key set in thier later releases (such as 10.03, bear in mind I had 4.81 prior to this release which is about 3 years old). However... Connecting a "streaming device" to a "render device" (as devices in the HDCP protcoll are called) should never render such a problem. Obviously connecting anything to a render device should always be OK. I have a suspicion that the BS3 somehow have gotten keys for "recording devices" incorporated (by misstake) and my AppleTV now is not allowed to transmit to it because of the common HDCP ruleset. Sigh... 

Again.. With B&O I'm not exavtly surprised.. Especially with the fact that they will never be able to sort it out (without downgrading my BS3 again..).. 

I suggest you look up HDMI spec in wikipedia.. This is not a bandwidth related problem.. 

Then technican update your Bs3 did they do a reset to factory after update?

If don't do that first (many strange problem after update of very old sw have been solved that way)

First you have to write down a few value from your screen BEFORE you reset the BSyS3 otherwise you have to pull down screen from wall

to see on the label at backside

RCT=

BCT=

WPR=

WPB=

BRIOF=

You find them in service menu in Submenu  "Panel/Pw adjust"

after reset you have to do all setup all over again such as conections tuning speaker and so on, and fill in the value for panel/pw adjust again

Hope that solve the problem

it's def. HDCP related as I have had clients with full picture on their screen via ATV2, but once they play something say with Netflix or iTunes Movies, they get the error on screen, yet the whole time they can see and control the menu, just not the content itself. The only remedy I have found is to swap cables with 1.4v new trusted cables. 

and it's not just B&O, anyones TV can have the problem. It's been a known ATV2 problem for sometime. 

Take a look for yourself....

Will look into this. This might be a worth a try. I've done a reset to defaults in the service menu but not to the extent where I have to reprogram intital calibriation info etc. as you describe.. 

How do you actually perform a factory reset?

Appreceiate your concern but I'm on a AppleTV gen 1 and I don't even get to see the menus.. This is not related to the cable (the ATV and the cable have been sitting there for years and always worked fine) as well as the ATV and the cable works just fine on any other tv-set I've tried. B&O or not.. 

I have what I believe is a HDMI 1.4 cable (I don't know about this 1.4v and what difference that would make) but I'm pretty sure this is not it.. Sorry.. 

Factory reset and reset to default is the same, so if you already have done that after sw update, you don´t need to do that again

but maybe calibration of screen are needed, but that have nothing to do with your Hdcp problem