Ive just purchased a Lilliput 7" 669GL-70NP/C/T-H, plugging it into a few different Pc's gave different results,
Windows XP SP3:
Windows detects it as a 1280*720 panel, only lets the monitor go above 1280*720, which i thought was strange, lifting the restriction and setting it to 1920*1080 allowed it to be displayed but with panning.
Allows it to display full 1080p??
not sure if it a driver/OS issue.
Anyway hopefully to help you with your problem.
Try holding the menu button in until the screen goes black, this enables/disables a zoom mode whilst in HDMI. Im thinking your is in Zoom mode right now.