AnimeIVTC(mode=2) removed most of the blending, but there are still occasional blends left behind.
Quick 5-minute job at improvement:
MPEG2Source("Composite_20110704_2251.d2v")
animeivtc(mode=2)
levels(17,1,190,0,255,false)
Crop(8, 4, -16, -10)
spline16resize(720,576)
Results: http://www.sendspace.com/file/n4xap7