Re: Hideous horizontal distortion

FCPX has a better green screen keyer than FCP7 so that part is good.

Still the problem is in fields and interlacing. You need to make sure all clip your field order is correct to the sequence settings. The reason I asked for clip and sequence settings is to better guess the problem.

If the final is for computer/ web playback then your final file should be progressive. So a lot depends on what you shot and how the sequence is interpreting.