I don't think this is a codec problem. What's most likely happening is that your subject is crossing this pole fairly quickly and what you're seeing is the result of the blending created by the Optical Flow algorithm. For example, take a look at this clip showing the results of optical flow.
http://www.metacafe.com/watch/1270539/super_slow_motion_optical_flow_retimi...
There are two areas where I think you'll see the type of artifact you are describing. The first is at about 52 seconds. Look at the arm. The second is at about 1 minute, when the frisbee crosses over the logo on the t shirt. In both cases you have significant changes between a short number of frames, and now you're trying to blend and stretch the data.
Lets say that in real time, there are 3 frames for the frisbee to cross the logo on the shirt. Frame 1, before it crosses, Frame 2, covering the logo, and frame 3. When you slow that down 25%. you're now generating 12 frames and only three of those are "real" the rest are interpolated and since you don't have a lot transition information (example: 2 more frame where the frisbee partially covers the logo) in those areas you sometimes get these artifacts. Optical flow is working correctly with the information it has.
The only way you could maybe minimize the results would be to use a different speed, faster or slower (oddly enough sometime slower fixes the problem). You could also try duplicating the clip, use a different frame blending and mask it over the optical flow clip.
