Yes I connected the underflow and overflow pins to the LEDs to test the activity. I guess you are the right the LEDs are active low, I had checked them earlier.
I also have the severe CVO underflow problems, I have checked previous threads about bandwidth without sucess. I also tried to use pipeline and buffer the output into external memory before sending it to CVO, all I get is flickering output.
I had a chance to meet with Altera Engineers in a conference recently and they told me the problem could be that I am trying to apply 2d filtering on 3 planes using one filter but the planes are in series, and also the size of my image 1920x1080 is too big to be processed with cyclone iii. with the maximum ddr2 memory controller speed at 166 Mhz.
The interesting thing is that there exists a video design from altera where all the processing and sampling has been implemented without any pipelining and I think that design must have worked although I could not test it.
And I could not get a simple DVI input output running without pipelining and using external FIFOs.
If you get any success do let me know?