Leo suspects it's the TV not automatically detecting the signal from the cable box properly. The TV is most likely set to "auto detect" the resolution to display, and the "blinking picture" that Peter is referring to could be the TV's inability to detect that on its own. Since Peter's TV is capable of 1080p, he should set his both his cable box and his Google TV box to 1080p instead of "auto".
He also should make sure he is using an HDMI cable with the most recent spec, 1.3 or above. He can find inexpensive cables at Monoprice.com.
It could be that HDCP is being broken, but if the copy protection isn't working properly, Leo says it would just downgrade the signal to 480i. The chatroom also says to hook up the box directly to the TV, bypassing everything else, and see if it fixes it. If it does, then it’s a handshake issue, and he should try updating the firmware on the Google TV box.