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Ginge said:
I was under the impression that there is still a level of reencoding when going from avchd to mkv. Regardless, the best method for mkv would be if it came from the source file.
What revgen told you is perfectly true. You can remux the AVCHD to MKV without quality loss and don't need to re-encode unless for some reason you want to, so there is no need to go back to the source file. (The uncompressed audio can be tracked down and muxed in easily enough.) I don't know why amorphous wants an mkv when most devices that play MKVs will play AVCHDs too, but if he must have one he can demux the m2ts tream with tsmuxer and remux with mkvmerge. Harmy's release is big enough to preserve quality at 720p, especially given the sources, so there is really no need for a big MKV release.
@The Aluminum Falcon
There is no need whatsoever to use BDtoAVCHD to do this (and a transcoded file would not be lossless). :-)