Here are the screen shots.
1. This is how the image looks like on canvas. It is not stretched or squished. This is how I want it to look on a DVD.

2. This is how item properties – format look of the timeline.

3. When I export is as QT with Current Settings and Anamorphic was checked under Sequence Presets, this is how it looks when I play it with QT Player.

4. And anamorphic is checked.

Can you guess what the problem is?
Thank you!