Your dxdiag file looks fine although the driver for your video card is pretty old (2000) you may want to try an update if you can find one.
Some questions..
Does the same effect occur for any of the DirectRT samples that use images, e.g.,
Code:
C:\DirectRT\Samples\4 applications\image priming\implicit.csv
If it's unique to this study you are running, I'd be curious to know if the images from the sample above look washed out when used in your study. Or, if the images in your study look washed out when used in that sample.