Sorry yes this is on the i.MX53 and rendering into the virtual framebuffer using OpenVG. Then using the physical memory address provided by the driver I setup an overlay with mxc_ipu_lib_task_init (this is the IPUv3 library). The implementation is an extension to the gstreamer plugin mfw_ipucsc which allows overlays to be provided. There is no local display, the video stream is sent over the network.
Where problems arise is that it would seem the IPU is having issues with the input and overlay having different colour spaces. If I disable the overlay everything looks fine, but if I enable it the corruption is seen.