DE0nano + OV7670 - managed to get image but its weird

Hello
Im having problems, trying to interface OV7670 with my de0 nano using 
this project: 
http://hamsterworks.co.nz/mediawiki/index.php/OV7670_camera
After few days of trying im getting images, VIDEO:
https://youtu.be/_uttMrgzheA
Problems:
- i have to reapply ov7670 registers setup after uploading it to device 
(it should be also done after startup);
- colours are terrible, almost cant see anything;
- resolution should be like 640x480 but after a while after upload solid 
colors appear at the bottom of the screen (can see it in video), 
moreover when im moving camera around some of the bottom pixels are 
changing too =(
Have anyone been doing this project on his fpga? (i have included my 
quartus files as attachment) - any ideas what might be the cause of 
problems?
My RGB DAC is 5bits per color so im using only the oldest bits for 
colors (i have RGB 332, so im using 3 oldest bits of red, 3 oldest of 
green and 2 oldest of blue, rest are set to '0' (LSB's).
Also in attachments ive added a screenshoot of TOP of the project (made 
it in brd because wanted it to be more clear in reading than just only 
vhdl files).