I recently purchased a WD Live TV and it upgraded the firmware when I connected the network cable. Since then, when I watch any movie through the network or from a flash drive, the audio drops every few seconds and then shortly thereafter the video blacks out along with the audio. It does this with the flash drive in the front or side socket.
When I first got the WD Live TV I connected it with the composite cables and had a rolling screen similar to an old TV with the vertical hold adjustment off. Then that straightened out by itself. I just bought an HDMI cable and stopped using the composite cable. During the course of my troubleshooting the dropping audio and video issue, I tried going back to the composite cable and was presented with the rolling screen once again, and it did not stop rolling. I reconnected the HDMI cable and changed the setting from AUTO(HDMI) to composite, shut off the WD Live TV, disconnected the HDMI cable and reconnected the composite cable (I did switch inputs on the TV so it knew which was connected) and got the rolling screen again.
This, coupled with the dropping audio and video, makes me think there might be an issue with the WD Live TV.
Right now it is running 1.01.24 firmware connected to a Panasonic 42" plasma.