Hello eide,
I assume that you are using the borescope that was in the kit. The sharpness in the picture seems pretty okay, but the lights are, as you already mentioned, hurting the quality really bad. I’m still searching for a viable workaround for this as you can see in my thread.
The only thing that really worked was to take pictures at night with the LED strips on. Since the LED strips are pretty bright, I lowered the supply voltage of the LEDs with a cheap stepdown module. Using a voltage divider might help aswell but its not really practical to setup.
Your camera calibration seems to be another issue. It seems like your picture was rotated more than once, maybe because the calibration was run with a rotated picture. I also suspect that the value CALIBRATION OBJECT SEPARATION does not fit, so your coordinates would not match to the pictures. But thats not good to see with rotated pictures.
Btw, you can get rid of these black frameparts by rotating your camera itself 
Here is my current view, that is kind of how it is supposed to look like:
(Looks like I need to check my water valve 
)
