I know this is an issue that has been brought up a lot and I've tried many of the solutions but none of them work.
I have tried disabling Accelerated video output/Overlay video output, changing the GPU decoding setting, altered all the caching settings under Input/Codecs, and I updated to 2.2.6 Umbrella. After each setting change I restarted VLC and the grey pixels remained.
Specifically with the problem:
-I'm watching shows that I've downloaded and it occurs pretty rarely, to the point that I ignore it for the 2 seconds that it happens and then it's all good.
-There's no chance that it could be missing information because when I rewind the episode to just before the pixelation occurs, it will continue playing perfectly fine over the area that was pixelated.
-For the first time ever, the pixelation lasted about 30-40 seconds straight.
-I noticed that if I pause it at regular intervals during the pixelation period, the pixelation will not occur.
-But these intervals of pausing are at max 1 second between pause/unpause, so the video is basically still unwatchable.