Great project!

BTW, "telecine" is film's 24fps converted to video's 30fps using one of various frame or field duplicating techniques. MovieStuff projector output is single frame in film format (24fps). In this non-telecined state, it is perfectly suitable for DVD (with added pull-down flag for the DVD player).

BTW #2, the "anamorphic" format is optically squeezed image for optical expansion during projection. It is perfectly suitable for DVD (with added anamorphic flag for the DVD player to letterbox for 4:3 TV, or widen for 16:9 TV).

Examination of your frame captures shows a noticeable color fringing. This is due to the quality of your camcorder lens? Double-checking the MovieStuff website samples shows similar fringing, only not as pronounced. If you don't mind mentioning, what camcorder are you using? Are you capturing in hi-def (note that 16mm resolution is greater than our present, consumer hi-def standard)? Perhaps you should check with MovieStuff if something may be done to minimize fringing with your equipment. Failing a solution there, it would be useful if someone has a de-prism filter for AviSynth.

Does your new expanded film-gate allow the 16mm stock to be captured edge to edge (including sprocket holes and optical soundtrack)? That might be helpful if there is an film-optical-reader filter for AviSynth (optical sound without the projector amp noise!).