Craig,
Thank you for your responses. I was ultimately able to resolve this issue – I had misidentified my problem.
FWIW: The raw footage was an odd size (640×424) that became 640×480 with the addition of the letterboxing. Though I thought “recompressing” was my problem, it was actually the fact that I was cropping out the letterboxing and returning it to 640×424.
I didn’t realize that YouTube uses the vertical resolution to determine playback quality – so the fact that I didn’t have a full 480 pixels forced it to downgrade even further, to 360 or whatever – which was the dramatic difference I was noticing.
Ultimately I was able to upsample it to trick youtube into thinking it was 480p, which was good enough for my homemade video.
Thanks again!!!