Beginning at 0:37 in this video you can see what I'm talking about. The frame flash at 0:53 is something that I've noticed happens some of the time when I apply a cross-dissolve to a clip that's been stabilized with Mercalli, so I'm not concerned with that at this time; just the strange pixelated/blocky stuff...
First, a brief summary of my workflow:
Capture DV from MiniDV tapes with WinDV.
Import AVIs into a new PPro project set up for NTSC standards.
Create an "editing" sequence where I do all of the trimming, color correction, Mercalli, dissolves, etc.
Create an "assembly" sequence and drop the editing sequence onto it, then add music WAV & narration recorded in Audacity (also as WAV).
Preview & encode for Vimeo (H.264/AAC, 640x480, square pixels, 30fps, CBR 1800kbit/sec, deinterlaced).
The pixelation doesn't appear in the source clips, either when viewed with WMP or from the PPro timeline in the "editing" sequence, but when I play back the "assembly" sequence it appears at different random places. If I export to AVI it doesn't show up in the resulting video, but it does in the H.264 version. I've used the same specs for other Vimeo videos and never had a problem, and because it appears in the playback window of the "assembly" sequence I don't think it's caused by the encoding. I've tried dropping the "editing" sequence onto a new & different sequence and it still occurs, so something must be happening as a result of the nested sequences, but I've used nested sequences a lot, and on much larger videos, and never had this problem... also, when I tried to open the project this morning, it said the file was damaged and couldn't be opened. I went back to the last autosave (I have it set to autosave every 2 minutes, yes I'm a bit paranoid about losing my work!) and it opened normally but the pixelation is still happening as before.
Any ideas?