Pixelated transitions

what gives??? ive experimented with every possible export setting, trying out new sequence settings, deleting render files, etc. ive seen this question floating around, unanswered. how to fix???? the transitions are on still images, should i reformat the still images somehow? first is how the image should look. second, is how it looks during the transitions. its subtle, but the jump back to the normal image is noticeable when the transition is complete.