You are correct. I was just helping someone on another forum who lives within 7 miles of the tranmitters, but is shadowed by a hill. The recent heat wave put a big hurt on reception conditions. However, this is a case of very strong signals and real line-of-sight paths. The pixellation in this case is due to multipath interference, reflections in the cable run, or signal overload.
If you have to call the installer back, have him read
this and
this from hdtvprimer.com. Those have been my primary sources for trying to figure out what's happening.
Good luck, and BE CAREFUL!