Thanks for the tips retrocanada76 I will check it out!
I am still fighting with Maniac Mansion, this time I am using the 1988 version. For some reason composite mode is not working through mce2vga but it works fine via the real composite port. I have verified with KQ1 before running Maniac Mansion, mce2vga works fines, colors are correct then I quit KQ1 and load Maniac Mansion.
You can see the results below, mce2vga is in composite mode and at the same time I have another monitor hooked up via composite , the machine is a V20 Hyundai XT-class one with a real old-version IBM CGA card, mce2vga is flashed with the latest fw.
Left is mce2vga in composite mode, right is composite straight from the cga (looking crap in this monitor since it does not really like any kind of composite signal)



and this the same with KQ1, no reboots, no changes in settings just the same deal as above (yes the direct composite connection is really horrible on this right monitor, it just doesn't work well with composite signals)

What could cause this behavior? Anyone else tried the composite function ?