I've had this problem before and for the life of me can't remember what I did to resolve it... I've edited a half-hour sequence in FCP and can't get a good QT export of it. It's a ProRes sequence, in SD, the material was captured from DigiBeta. I have a number of very straightforward dissolves and these are causing problems. The timeline and the exported file play fine on the computer but when I play the QT through a video projector, I get 'flashing' at the in and out points of each transition. What that means is that, at the 'head' and 'tail' of each dissolve, before the incoming clip has even started to fade, there's a noticeable shift in brightness and contrast across two frames. This happens with all the transitions whether they're straight cross dissolves on the same track, or whether I've overlaid clips and used the opacity settings.
I used ProRes because I'd had problems playing 8-bit or 10-bit files of the length I use from a Mac mini (which is what I use for playback in the gallery). ProRes seemed to offer a good payoff between file size and quality.
I tried changing my sequence settings to render all YUV material as YUV, upped the Motion Filtering Quality to Best, and so on, and no difference. I wondered whether this is something to do with Field Dominance - the captured clips all have 'None' as their Dominance (they were captured using an AJA IoLD that I had before my Blackmagic card). But the sequence is obviously set the same - should I uncheck the box marked 'Interlaced' in the Sequence Settings > Compressor > Advanced dialog? This only gives me a choice of Top or Bottom, so perhaps that's a source of interference? But will this then de-interlace my footage??
My edit is complete, everything's ready to go and the show opens tomorrow night - we have time to tweak and export again, but I may not be able to play full uncompressed files so hopefully that's not the only solution.....
(FCP 6.0.6 running on a 2.8 GHz Quad-Core Xeon Mac Pro, OS 10.5.8, 2 GB RAM, Blackmagic Decklink HD Extreme 3D).
Did you ever find a solution to this problem as I'm having the same thing happening. It will either skip on the transitions, where the frame seems to bounce back n forth wherever I've put transitions or just flash frame like you said.
My memory is that it was ProRes that was the problem - it's not designed as an exhibition format, just a space-saver when you edit.. so I output the piece using another codec (I think I output it as DVCPRO50 or else as an 8-bit or 10-bit uncompressed file, I forget which) and it was fine.. Hope this helps..