You could use the lagarith codec to produce a lossless avi and the file size would be about 200gb, but if powerdirector won't let you export HD avi then i guess that rules that out.

I would suggest that you can now probably rule out MultiAVCHD as the cause of your problems as this is a completely different problem. Your problem is lying with powerdirector. It's somehow screwing up its encoding. Just because you paid for it don't stay with a piece of software that is causing so many problems. Especially if it will only output NTSC @ 29.97fps. That software is so limited. Even at such a high bitrate powerdirectors mpeg encoding is very soft and not very good. If you are going to work with HD files then you really do need a lot more space.

I'm surprised at just how many people say they hate Vegas, but when they bother to learn how it works they realise just how good it is and the power that this piece of software has. And the output results are far superior than software like powerdirector.

Have you checked the encoded video in a different player to see if the artefacts are still there?