[Tim Bluhm]

May be a little late for you, but for those who follow, I ran across this problem myself and after searching the internet to no avail, finally figured out a solution. First split the layer at each of your edit points, then precompose each of those new layers. Then it will stop trying to frame blend across the edit. Just splitting the layers without precomposing them is not enough. Kind of a PITA, but it works.

-added:
Nope, never mind. It worked on a test clip, but must have been a fluke. Still would like a solution as well.