Apple TV - No Picture on Menu

I updated the Apple TV over an Ethernet connection and now it will not display picture, only a blank screen. Its working in the back ground as I can hear beeps when I press the remote.
I've held Menu/+ and the Apple Logo appears and I am able to try all picture formats. When I press 'OK' the screen goes blank again.
To confuse things further when the AppleTV goes into sleep mode it starts displaying my photos on my TV screen.
Any ideas?

what video resolution do you have the appletv set to ?
if it's not set to 720p then change it to that and see if the problems go away.
also, if the appletv is displaying photos then it is not in sleep mode.

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