@Gwion:
1- Are you 100% sure you're using a PAL Amiga and A520?
2- The Amiga is set to PAL? What A2000 version you have?
3- For 100% sure: the A/V is routed from the side RCA connector (Video out)?
4- Are using the "tick" signal (J012 set to "external") in a 50Hz voltage system (outlet frequency)? 50Hz Amigas will experience not-so-funny behaviour other way.
5- Did you try a game or in Workbench? Workbench screenmode is set to more than 2 colours?