As I mentioned in my first response to your post, you should try the Quicktime Export using the Animation codec (set to 100% quality) and see if it has the same result. If it does, you know it has nothing to do with the source file, but with how Encore is encoding to mpeg2.
If the quicktime file does not resolve the issue, I would try encoding to mpeg2 outside of Encore using the Adobe Media Encoder so that Encore doesn't have to do any transcoding.
If that fixes the problem, then I would double check your transcode settings in Encore... in fact you might want to do that now before doing anything else.
Jon Geddes
Providing the Best Motion Menu Templates Available for Video Production
www.precomposed.com
