>>You may be trying too hard.<<
Oh, man, that's funny. Because listen to what else I did: I went through the entire film (it's 3 minutes) frame by frame and added compression markers all over the place, like 700 of them. Seriously.
And you know what, it still sucked. Every frame that I hadn't specifically pegged, sucked. Boy, did that ever hurt.
So, advice to everyone... um, no need to do this.
Anyway, to put you at ease, I had started with the general settings and only then crawled into the bitrate and the IPB parade, hoping there would be a magical threshold. But desperation leads to desperate acts.
Anyway, I have another solution finally. I have the disk in three forms now, and need to ask the experienced people which version is going to be the best. I'm going to ask it in the "General Editing Question" thread, to keep all the answers in the same place.
Thanks,
Mike