Toorum's Quest II - ATmega328P based retro video game with 256 color graphics

Oh, I just realized that you're running the AD725 in PAL mode but the video signal is synced to NTSC. Your TV is probably confused about this and tries to interpret the colors as if it were receiving a NTSC signal? This might be the culprit for the strange colors… or maybe not, I would expect the colors to be totally off...