Here is the workaround the OP uses: You need to install Catalyst 9.7 Drivers. However, that's easier said than done. See below for instructions. THIS IS FOR ATI iMac's ONLY!!!!
If you have an nVidia iMac, you can probably download the latest and greatest drivers directly from nVidia - just make sure that you get the laptop variant:
http://www.nvidia.com/Download/index5.aspx?lang=en-us
Select the correct "M" variant, i.e. GeForce 9M series (Notebooks) for a imac with a 9400M nvidia chip.
I have not tested this, so I don't know if it will work, but nVidia directly provides mobile card drivers, while ATI does not.
It's a bit complicated, but it definitely works. If you don't feel comfortable doing this, please don't as it deals with modifying drivers. I am not responsible for any damage you do! This is not supported or endorsed by Apple, ATI, or anybody else. Also, all the driver versions are being recalled from memory, and im 95% sure they are correct, but I may be off by a digit or two.
So basically, the problem is that the drivers that Apple uses for iMac's aren't supporting the full HDCP chain - but the LCD IS HDCP compliant - its merely a driver issue.
Normally, this isn't a problem, as you can just download the latest drivers. But because Apple uses a Mobility ATI chip (not desktop) in the iMac's, and the drivers are actually not updated with the standard ATI Catalyst download (10.3 as of 4-7-10).
So, this means that we are going to have to modify the Catalyst drivers so that our Mobility chipsets CAN be updated. So, here we go.
1) You'll need this this tool to modify the ATI desktop drivers so that they will update the mobility chip in your 27" iMac:
http://www.gamingheaven.net/modtool.php
Please follow the full instructions on the above website, but with these changes:
a) Go to step 2) below instead of step 3) on the webpage - the current ATI drivers are too new to use with this tool, so you need to download an older version - 9.7 is confirmed to work with HDCP.
b) Do not complete step 6) on the webpage for now. We will do this later.
2) You'll need these Catalyst 9.7 drivers:
64-bit: "http://downloads.guru3d.com/ATI-Catalyst-9.10-Win-7-%7C-Vista-(64-bit)-downloa d-2413.html"
32-bit: "http://downloads.guru3d.com/ATI-Catalyst-9.10-Win-7-%7C-Vista-(32-bit)-downloa d-2412.html"
This is for Vista and Windows 7 ONLY, XP doesn't support HDCP iirc.
3) Follow the instructions on modifying the downloaded drivers from step 2, found at step 1's website
4) Now, this is important. The Bootcamp 3.1 drivers are actually a newer set of drivers, but don't support HDCP. They also have terrible banding, and reduces image quality noticeably. However, because they are newer, running the modified Catalyst installation will still not update the drivers. So, what you need to do is simply roll-back the graphics adapter driver to the last version IF YOU ARE USING BOOTCAMP 3.1 drivers. Here's how to tell and roll back:
a)Get into Device Manger (Start --> Run --> type devmgmt.msc --> OK)
b)Under Display Adapter, right click on the ATI 4850 (or whichever ATI card you have), and select properties
c)Navigate to Driver tab. IF you are using bootcamp 3.1 driver, the device driver version will be 8.681 and you WILL NEED TO ROLL BACK.
IF you are using bootcamp 3.0 drivers, the version will be 8.661 and you do NOT need to roll back (skip d)
d)Click on the Roll Back Driver button, the screen will flash with a successful roll back (and the banding should be gone). Check to make sure you are now using the 8.661 drivers from step c), and then reboot the iMac.
5) NOW we return to the instructions on the webpage from step 1), and complete step 6) from the Mobility Modder webpage.
NOTE: Like it says on the webpage, you'll get a nice red warning about how the drivers aren't certified. Unfortunately, if you want Bluray, non-certified, modded drivers are the only way to do it as of 4-7-10. But you shouldn't worry too much, ATI uses a universal driver system. The only difference is that the specific hardware id isn't listed on the drivers. This is what the MobilityModder does - simply adds in the device ID and its corresponding normal settings into the hardware list. However, when using this method, the certification cross check fails, and you get the warning dialog.
6) Reboot
Now if all goes well, you can check to see what driver version you are using, the number is between the 3.0 (8.661) and the 3.1 (8.681). You will also not have any banding like you did with bootcamp 3.1 drivers.
A Bluray tool may still show that the display is non HDCP compliant (my Cyberlink one did), but when using the actual software, the video plays back just fine. There really is not better use of the massive 27" display than to watch some serious Bluray content - the clarity is absolutely stunning.
