This problem is a lot easier to diagnose if you include a screenshot with the modified properties of the layers giving you problems revealed. Just select the layer and press the U key twice. I'm guessing that the edge of the comp frame matches the edge of the png file. If that is the case then turning on Repeat Edge Pixels would simply remove the blur because there is no detail in the white squares. You could check out how Repeat Edge Pixels works by loading a photograph into the timeline, moving it to the edge, applying a fair amount of blur and then cycling the option on and off. From all indications the effect is working as designed.
If you can't solve the problem by scaling the images vertically or there is something else going on in your composition let us know and provide a screenshot that tells us something about what you are doing in the comp. Otherwise you'll have to replace these white squares with ones that extend beyond the edge of the frame. I would just use shape layers.