First I should say that I also gave up and just used the composite output. But I don't suffer any of the aspect problems you mentioned and I get quite a reasonable picture. The aspect can be adjusted in the Slingplayer. How are you sending the stream to the TV ?:
1. For obvious reasons, most new boxes don't have component video outputs so people cannot bypass the Copy Protection. So it isn't just Sky users that are affected.
2. You have to remember that the HDMI Splitter and/or the HDMI/Component converter also have to strip out the HDCP signal to enable you to watch video. Now, while not actually illegal, the TV Companies obviously frown on this so very few manufacturers will openly admit if there boxes do it or not. That is why there are a few recommendations on this forum for boxes that are know to strip out the HDCP signal successfully. Maybe yours doesn't do it. Sling recommend a GangHu one, some users have reported that this one works OK, although not sure if it is available in the UK.
3. I think you will find the troubleshooter assumes you are using a component output, which will be disabled if you are using an HDMI lead to feed the TV, hence the advice to remove the HDMI lead. So it doesn't apply to you.
As I said, I am quite happy with my composite feed.