Hi Dave90x,
Did you find any solution to this problem? I have the same problem when trying to connect my Macbook Air 2013 to a LG Flatron E2770 it was perfectly working before for months! but then I had a problem with my HDMI adaptor and replaced it with one that looked more durable.
Right after buying it I came back home to test it and then surprise! not working and instead I got that message "HDM1 Power saving mode". In the beginning I thought it was the cable that was not working but then I connected the macbook air to a small sony TV and it perfectly worked then I thought might be the resolution so then I reset the Mac's parameter RAM and SMC and also tried the safe mode but no results. Then delete the files "com.apple.windowserver.plist" and the ".icc" but nothing worked at all.
I also connected the macbook air with the same cable to my sony projector and to a 70" aquos tv and it perfectly works video and sound so is definitely not the cable. So I thought it might be the LG screen but i connected my HP to the same HDMI input1 and it perfectly displayed everything so then I connected my xbox to the input HDMI 2 and also worked with no problem at all even the PIP function was tested and working with no problem at all.
I have no idea at all what else it could be but it has become an extremely annoying problem (´・_・`)
Any help would be appreciated!
Thanks!