Almost every 1080i TV I've ever seen aren't 1080 native. They're 1366x768. (some are even 1024x768....bleh) They only say they accept 1080i video for marketting purposes.
Change your resolution to 1360x768 and try again.
If it was blurry at 1280x720, I don't think 1366x768 will be much better. Remember, this a rear projection screen, and a CRT type one at that, and I'll be the first to admit I don't know much about them, but I know they don't seem to work the same way as native HD displays do. It doesn't appear to have a real native resolution, and everything I've found about it's specifications lists nothing for a native resolution. It just highlights that it'll do 720p, 1080i, and upconvert all sources to 1080i (and yes, this is often in it's description or features part, not specifications part, which makes it just seem like the usual marketing stuff). I tried 720p via component from my PC, and it looked only barely better than S-Video. That same component connection from broadcasting in HD, however, looks pretty good (though probably not as good as a true native HD display would show 720p/1080i).
Crysis doesn't count as a game Shadow, its only used for e-penis stroking contests.
Personally, I love the game. Just because it's hard on performance and people use it as a benchmark, or just because it may not be the best optimized game, doesn't mean it isn't a game. I don't use it for benchmarks, at all. I use it to play it, and personally, I've loved both of the games. I'm awaiting the next two.
Edit: Televisions aren't my specialty, but besides the older and larger CRTS thad could do 2048x1536, there's only two displays that come to mind that are over 1920x1200, and that's the Sony GDM FW900 (2304x1440 Widescreen CRT) or those large LCDs (2560x1600).