Not sure I can explain the problem well, so I took a one minute movie with my digital camera (see below). Note: the TV is not b&w, the color is affected by the VCR when on / playing.
I tried running the below product a couple of times (with the fluid). It did not have an effect. Is it possible that it is necessary to do it several times?
Sometimes head cleaning tapes work and sometimes they don't. You can keep running it through. For what it would cost to get it cleaned you can easily buy a better one from Craigslist, a thrift store, the newspaper, etc., so you've got nothing to lose.
90% of Magnavox VCRs are Funai, the cheapest VCRs made.
But you would definitely say, from the looks of it, that it is a case of heads needing to be cleaned and not a mechanical/repair issue of some kind (i.e. can the latter be ruled out)?
It looks like it needs cleaned. If it's a 4-head try this, whatever speed that tape you used is try one in another speed, if it's SP try EP and vice versa. 4 head VCRs use different heads for SP and EP and sometimes only one of them is dirty. It won't work with a 2-head since they use the same heads for both speeds.