Projectors that use reflective light valves must employ beam splitters or analogous components to separate bright-state light from dark-state light, since both states must propagate in the space above the light valve. Polarization ray tracing shows that such beam splitters will not usually achieve high rejection of dark-state light when the beam has the typical angular divergence of about +/-10 degrees. At such propagation angles, different rays in the beam will have appreciably different planes of incidence at tilted optical coatings in the system (because of the compound angles involved). If the light valve is mirrorlike in dark state, we show that to correct the depolarization resulting from compound incidence angles, it is necessary that the optics introduce no rotation in the illuminating polarization. To a reasonable approximation, such a rotation in polarization will double in the return pass through the optics. To the same approximation, induced ellipticity in the illuminating polarization will cancel in double pass, and pure rotation can be converted to pure ellipticity with a quarterwave retarder. An important qualification, however, is that a light valve can only be exactly mirrorlike in restricted cases [i.e., if linearly polarized input light remains exactly linearly polarized (though possibly rotated) at all wavelengths when it reaches the mirror backplane of the light valve, independent of small manufacturing errors]. We calculate contrast loss in the more realistic case of a reflective twisted nematic liquid crystal (TNLC) light valve interacting with tilted coatings in the projection optics over finite numerical aperture (NA), and discuss the impact on LC thickness tolerances and spectral bandwidth Delta lambda. We extend our results to apply to more general light valves and more general projection optics configurations. Dark-state background is found to scale as NA(2) (or in some cases as similar to NA(2)Delta lambda(2)). Because of this interaction, the complete system almost always shows a lower contrast than the light valve alone.