Sorry my bad on the uncompressed mpeg file but here is the output when I open the file with Gspot:
Video
Codec: MPEG2
Name: MPEG-2
Audio
Codec: MPEG-1 Layer 2
Info: 0xc0:48000Hz 384 kb/s tot , Stereo
Everything looks normal so could it be a setting in Vegas?
Thanks for the information about the project wide pan/crop event. I will definitely the nested solution because I have alot of clips in my video (I am making a video game montage)