Make sure you try VOB2MPG as well, if you haven't already. It converts VOB to MPG without re-encoding the video stream itself, and there is a free version.
http://www.svcd2dvd.com/VOB2MPG/default.aspx
VirtualDubMOD could be a free alternative to TMPGenc if you want to covert to AVI uncompressed. It's less wizardy friendly gui though.