I worked with Greg on this issue and discovered the blurriness in AME was caused by GPU settings being set to Software Only (AME 7.1 has its own GPU rendering settings, separate from Premiere’s). Switching GPU to OpenCL sharpened the image up significantly, see this post on the Premiere blog about GPU and scaling:
https://blogs.adobe.com/premierepro/2010/10/scaling-in-premiere-pro-cs5.html
Still, the blurriness Greg was getting with Software Only was excessive so I had him send me his project and discovered his sequence had “Scale to Frame Size” enabled. When I turned that off and re-scaled the clip to the same relative size within the sequence the blurriness was much less.
-Larry
AME QE