The resource I always point to is Doom9.org. The forums there are where all the people who actually write apps like AviSynth hang out, so it's a rich treasure trove of all things digital video.
The steps you're probably going to need to take are:
1. Produce a D2V file from your DVD source, using DGIndex.
2. Write a quick AVS file for AviSynth, loading the D2V.
3. Cropping black bars is super-simple with AviSynth: Crop(0,100,0,100) should probably get you in the ballpark.
4. Adding true black bars is also super-simple with AviSynth: AddBorders(0,100,0,100) will be close.
5. MPEG-2 encoding is the trickiest part for me, since I've never gotten to that stage. But I know you'll want to use TMPGEnc or CCE to render it out, probably as elementary streams.
6. You'll need to re-author the DVD. DVDLab is a popular choice.