Sadly, I wish I had an answer for you but I had the same problem tonight. The only difference was my starting media was 1280×720 24P footage from the HVX200. I did the same thing. Pulled the Premiere project into AE, and rendered out of the Render Queue a Tiff Sequence, maintaining the aspect ratio.
Then I dumped out of Media Encoder as the MPEG2 Widescreen default. Playback on a widescreen source looks perfect. Its playing back on a fullscreen source that effs it all up. Even within Encore’s playback feature, it letter boxes the footage as it should.
I tried a few DVD players and I’m wondering what else there is that I could do. I though about manipulating the Transcode Settings from within Encore, but considering my MPEG2 footage didn’t need to be transcoded, this would only elongate the process.
Two different sources, one very similar problem. Hopefully someone can help us figure it out.
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Alternatively, I was just going to attempt to make a second set of timelines that would feature a letterboxed MPEG2 and leave a choice on the DVD menu, which one to access. Not sure if that’s possible, but I figured it has to be worth a shot. Right?