Write an AVISynth script to perform IVTC, crop and resize to DVD resolution. Here is an example:
LoadPlugin("C:\Program Files\AviSynth 2.5\plugins\DGDecode.dll")
MPEG2Source("blade.runner.1080i.dd5.1.oar.0006.d2v")
doubleweave()
pulldown(0,3)
crop(0,142,-0,-150)
spline36Resize(720, 354)
addborders(0,63,0,63)
(Obviously you will have to adjust the values for your particular source).
Now encode as normal.
You might find issues with your audio going out of sync. I think the only option if this is the case is to adjust the delay value in your authoring package manually.