I have the same issue. If I run quake the display is fine, But in retropie the display is so poor I was about to contact you thinking it was broken. It’s like an slightly out of tune old TV. Also in the retropie main menu the sound is hissing all the time.
use disable_audio_dither=1 in /boot/config.txt this solved my audio hissing
I fiddled with the buttons from the LCD controller and screen the menu in retropie gives me 1920x1200x60HZ. I am not sure why is this since i have also the 8" LCD and I understood that the display should be 800x600? Maybe the is related to the display cutting off(see my other posts) and the increasing of max power through the USB ports.