Are you running this off your domestic TV, or does it have its own screen (TV)

If it were a PC I would look at the monitor and videocard. But AFAIK a Dreamcast doesn't have a video card.

If it is your own TV, try it on another one, it might be a compatibility issue. I have come across that with both videos and games boxes. Try to run it with equipment of similar age/technology.

Best I can think of.