enigmatic puzzle - How were the Japanese planning to corrupt the youth of The West?

1980 - Location: Classified

"Commander, we've received a message from a deep cover asset in Japan".

"Well decode it then, what does it say?"

"Well, erm. This asset is a little eccentric boss. He doesn't trust ciphers, never uses them. But he's sent us this. Apparently if we work it out the message will show us a picture of a new threat set to conquer the world!"

You are handed a sheet of paper, each side contains a grid of letters.

|JFILLUQTWOVD|
|EMPTYSEIGHTO|
|YMMZIIXWAKLW|
|YAHYENVTORCN|
|CREADGEVERYR|
|THIRDPLUSTWO|

|PEAACR_H_J_#|
|LD__ITNK__ER|
|TCTRS##MWLM_|
|_CTULHAM_RNP|
|#_RNKIKUMF#E|
|FBSYJ__KS#LQ|
|LBUJK_#H_IBE|
|H_SKL#OLASRN|
|ABDLN#KHT_#R|
|ABIE#APKNSTG|

|_BLNOEIMSIS#|
|LCPG_LOMUXV_|
|MC#TNOEKNTWE|
|#D#HRFEHOW#R|
|WE#HFAU_NXI#|
|V_ISTCV_OYEN|

Answer

Varoius agents have already deduced that ...

... the message can be found by following instructions that are encoded in the grids. These instructions lead to further instructions step by step and ultimately to a "picture of a new threat", as stated in the OP's briefing.

Step 1

Techidiot and stack reader found that the upper grid contains several English words:

Across: FILL TWO EMPTY EIGHT READ EVERY THIRD PLUS TWO
Down: USING DOWN

Step 2

Read every third: Eric found out that reading every third letter from the lower grid yields:

AR_#_T_RT#W_TH_PRIMES_SQU__ES#AND#TRIANGLES#PLU_#ONE#FOR#AN#ICON

The hash marks # are spaces and the underscores _ are unknown characters, so this could mean: Start with primes, squares, and triangles plus one for an icon. (Anaylsts have confirmed that the first word isn't important.)

Step3

Start with primes ...: Reading all the letters whose indices are primes (2, 3, 5, 7, 11, ..., 181, 191) yields:

EAC__LINES#_LANK#F_LL#BLANK#A#IS_ONE#E#FIVE

or Each line's blank. Fill blank. A is one, E is five.

Step 4

... squares, ...: Similarly, reading the letters whose indices are the square numbers n² (1, 4, 9, ..., 144, 169) yields:

PA__T_#Y_L__W

which probably means Paints yellow.

Step 5

... and triangles plus one: Finally, read all letters whose indices are triangular numbers plus one, i.e. ½·n·(n + 1) + 1, which yields:

EA____S_RU_#L___TH

This could mean: each as run length. The last three steps were decoded by Daphne B.

Step 6

The following snippets of instructions haven't been used yet:

PLUS TWO FILL EMPTY EIGHT USING DOWN
For an icon.
Paints yellow.
Each line's blank.
Fill blank.
A is one, E is five.

Each as run length.

They could be rearranged into: For an icon, paints yellow each line's blank. Fill blank using two plus eight down, each as run length. A is one, E is five. Fill empty.

This seems to indicate that we should draw an icon by converting the letters in the eighth column to numbers via A1 ... Z16 and using these numbers as run lengths, i.e. adjoining units which should be painted yellow.

Now the letters in the second and eighth columns where not both are blanks gives this symmetric layout:

EH DK CM CM BK BH BK BM CM CK DH

Converting these to numbers and treating them as run lengths of leading spaces and of pixels to paint yellow gives:

start → 5, 4, 3, 3, 2, 2, 2, 2, 3, 3, 4
length → 8, 11, 13, 13, 11, 8, 11, 13, 13, 11, 8

With this information, we can print bars of yellow with the given length and starting in the given columns.

Picture of threat to humanity (SFW)

     ########
###########
#############
#############
###########
########
###########
#############
#############
###########
########

CHOMP! CHOMP! CHOMP!

Pac-Man was first released (or should I say unleashed?) in 1980. And it is yellow. And user pacoverflow has known the answer all along: He commented his guess while the puzzle was in early stages of decoding.