I did a very rough test with an old 8mm projector, just to see the frame-blurring, and it is prominent. There may be a work-around, but I don't have access to a 35mm projector and won't be able to do a serious test unless I find someone who does.

When looking into the cost of buying a 35mm projector (several thousand $), it occured to me that it would be cheaper to pay for a true telecine. I found a quote through google for about $1,000 for 120 minutes, and that includes cleaning. Not bad, assuming we can find a print and the teleciners are willing to transfer copyrighted material.