Sorry for piggybacking, but I’m having the same issue here. Or, I was, and the problem has become worse. Perhaps these details will help?
Last night, the first time I tested the device, it worked brilliantly. After changing cartridges in the N64, I started only to see a test pattern as described above. I made many more attempts throughout the night, but only successfully saw a picture two more times.
When I tried again today, the input lights blink rapidly once I introduce the HDMI cable, which I assume is a failure indicator. I have only introduced composite signals from official N64 and Sega Dreamcast cables.