I'm driving myself into a wall!!

I own a JVC surround sound system RX662V
I just bought a JVC XV-D701BK
Also bought a JVC 20'' AV-20020

When I connect the DVD to the back of the receiver, I get a picture but it fades in and out and the vertical hold is screwy.

If I connect straight to the TV it works fine but then I lose out on the surround sound.

How do i connect it in order to get the surround sound?

FYI, the TV nor the receiver has a S-Video input jack.

Thanks for any help!!