OK! I finally got it to work. Turns out the culprit, at least for me, was the hdmi to vga adapter I was using. This is the one I'm using now: http://www.amazon.com/gp/product/B00YC7U0NE
I did find that if you mucked with the smoothness settings (hit +/- while in capture mode) it would lose the video signal and never re-acquire it, with the mode button continuously blinking. This made me think I was in the same situation. However, when I switched inputs (cable to media center to FireTV, for example) it would resume broadcast of the video and work as expected. That made it very frustrating to set, and I'm not sure I have it just right, even now.
Here's my setup. I also used the Archer intro because it showcases colors and movement at the same time.
https://www.youtube.com/watch?v=HNgRZ3_-t_g
Hope this helps. Please ask any questions, I'm happy to help.
I would be very surprised if there was anything wrong with the LEDs. The big issue folks have had (including myself) is the gold connector and associated cable. I replaced the cable/connector and have had good results.
WS2812B should work - I had 20 left over after my install and have been playing around with them with an arduino and that was the best mode.