I got the old demo version of Star Control II from here, and while it seems to work fine in DOSBox the colours in the game are too dark, even though the intro sequence does not seem to have this problem:

Except from the very dark colours, the demo apparently works fine in terms of playability, you can even save your game etc.

This seems to be completely different from the palette glitch issue in the full game which has been reported numerous times here (e.g. in this thread). I've checked a YouTube recording of Star Control II gameplay, and it appears that the colours are supposed to fade in to full brightness at the start of the game but this does not happen in the demo.

I have tried using different DOSBox settings, including setting cpu type to 386, minimizing RAM and VRAM, and turning off Sound Blaster emulation, to no effect. The problem persists both in vanilla DOSBox and SVN Daum builds as well. A quick check of messages at Google Groups suggests that back in the day people could play the demo normally without any issues of this kind.

Any idea what could be the cause?