Problem with Airplay Mirroring: Image Cut Off

I have a mid 2011 Macbook Pro. I have installed Mountain Lion. I am able to activate Airplay Mirroring, however, part of the image is cut off. In other words, what is shown on my TV is only about 2/3 of the image that is shown on my macbook. It is not showing a black bar, or anything like that. It is more like the image is enlarged and doesn't fit on the TV screen.

I have searched the internet trying to find a solution. I haven't found anyone with this problem. So, my question is, do I have some settings wrong? Or is it a problem with the settings on my TV? If anyone has suggestions for troubleshooting this problem I would be grateful! I really want to use airplay!

Thanks!