I rememeber encountering a similar problem but if it's the same I'm not sure.
Try or make sure you're running Ys 1 without other programs open, or at least make sure you are running Ys without anything behind it [or something animated on the start menu]
For me, when i had winamp or AIM or something behind Ys, it would causes glitches; and one of them caused everything to invert... You might be able to alt tab out of Ys and try going back in to fix it; Also make sure you have enough colors enabled... [I run with 32 bit color] and I think it might full screen to 16?