Hiya , I have exactly the same problem (Black and White Picture). I was hoping to access S Video through the Scart lead on my DVD Player (After setting the output to S Video first of course). It seemed the Scart only outputs RGB, not S Video as well as RGB , this was confirmed in by the Manufacturer (Sanyo). It seems the same problem as yours.
The only solution for me was to get a S Video to Scart Cable as my Sony TV does not have a rear S Video Socket. (AV2 Scart accepts S Video)
Hope this info has been useful.