I too have a CLD-D704 and have had similar problems. I asked a laserdisc repair expert about it and he said that this is an unknown problem that happens with certain players while playing CLV discs. There is no way to fix this problem unfortunately. The problem doesn't occur with CAV discs though.

My only suggestion would be to try capturing with a regular composite cable instead of s-video and see if that helps any. Using a composite cable allows you to utilize your capture device's comb filter instead of the much older one found in the LD player, which usually results in a better capture and less dot crawl.