Hi mightymike1000,
You mentioned that this behavior only occurs with the Shared Album you have set for your screensaver, and that others appear as expected without the distortion. This would indicate a likely software issue, so we'll want to ensure that your Apple TV is up to date. Update your Apple TV will walk you through updating manually.
"Update your Apple TV manually
- Go to Settings > System > Software Updates and select Update Software.
- If there's an update, select Download and Install.
- Wait for your Apple TV to download the update. Keep your Apple TV connected and plugged in to power until the update is complete.
After the update downloads, your Apple TV will restart, prepare the update, then install it. When the update is complete, your Apple TV will automatically restart again."
We look forward to hearing the results.
Regards.