Amd 6850 upscaling everything?

I just recently built a cheap little pc.

Amd 965 black edition 4.0ghz overclocked processor

Ati 6850 gpu

8gigs of corsair vengeance ram

Asrock extreme 3 mobo

Xfx 650watt power supply 80+ bronze


Its actually a really nice machine for 420$. But heres my problem. If I want to play a game say Crysis 3 in 720p, going full screen upscales it to 1080p. See, even if the desktop is in 720p, the game still upscales. You can go to the graphics options menu, change it to 720p, still upscales. I've played around with some of the various scaling options in the Catalyst control panel. The computer handles Crysis 3 with high/very high settings just fine at 1080p, with an average of around 35fps. Problem is, I really want to play it in 3d and closer to 60fps, which will only work in 720p correctly. 1920x1080p on my 3dtv won't allow 3d content, but 1700x1000 does. Doesn't look right. 

So if I use 720p, I can't use 3d because of the upscale on the GPU. Problem is, unless I play it windowed, there is a noticable lag playing it this way. Turning off all the scaling functions doens't do anything. SOMETIMES Control+Enter works, as does alt+tabbing out. But its a very rare occasion. Takes at least  15 times to find something that works. When the gpu sends a true 720p signal to my tv, there is no lag and 3d works perfectly too. 3d is better supported by Nvidia cards, so I'm not all that worried about it. 

Tried the latest official drivers, then the beta drivers. Crysis 3 has the latest patch from origin downloaded. Just curious to see if anybody has had this issue and what they did to fix it. Wouldn't be such a big deal, as 35fps with crysis 3 on 1080p isn't bad. But in the next year, when games get more graphically demanding, I'll have to use lower resolutions like 720p. With this upscaling it'd be unusable. Hope I was clear enough on the situation. 

Thanks to any answers!

Providing alittle additional info. See, the gpu and computer knows my tv is natively 1080p. Now, I can set the desktop resolution to 720p an it'll work perfect. As it does with some games as well. Lets say the desktop resolution is at 1280x720p. I'll start certain games like Crysis 3 and the original Crysis, in fullscreen mode, and they'll be set to 1280x720p too. But as soon as you start the game, the tv shows its recieving a 1080p signal now. Creates a weird lag. It does the same thing on another non 3d 32inch tv. 1024x600 and such all get upscaled. 

I know the tv ITSELF will upscale everything to its native resolution, thats normal. But its the gpu upscaling that I'm having issues with. I believe there may be some trick in the Catalyst control panel that I'm missing to fix it.

Sorry for whats almost a week bump, but I wanted to add just in case anyone else has a similar issue. But doing some digging around helped me find a few things. Using an HDMI cable, in gaming, you're stuck with the game being upscaled to whatever your tvs native resolution is using modern ATI drivers. If scaling is turned on or not. Only the desktop will it be in the true resolution you set it to. I ended up calling AMDs techincal support, and thats what I got out of them.

Though, I did fix the lag and the use of 3d. By turning Overscan to 0, somehow surprisingly, there was no input lag anymore. Plus 3d was usable, which thats obvious. Problem was, even though the GPU upscaled everything to 1080p, every resolution you set the computer to- you had to reset the overscan on every resolution. 

So lets say I naturally have my desktop resolution to 1080p. I start a game of crysis 3, and want close to 60fps. So i'm going to turn it to say 1280x720 or even 1440x1080p. You'd need to set the desktop resolution to those resolutions for 1 time, set the overscan to 0. Then you won't have to again. Then the desktop resolultion can be whatever. But if you leave the desktop resolution in 1280x720, during the game, it still will upscale to 1920x1080p if gpu scaling is on or not. So the main issue is fixed, but if you don't like how the GPU upscales and prefer your tv upscaling, you're screwed.

Max resolution for HDMI is  1920x1080 (native 1080p) This size --> http://i.imgur.com/47uVJMx.png (click zoom on pic for full size) 

So as you can see 1080p isent actualy that big if your monitor or tv is bigger it will be upscaled to fit the screen.

If you what to use larger you need to use a displayport (this can handle 2560 x 1600 resolution) This is still upscaled if your monitor or tv is bigger than the image

maybe a settings in your monitior.