I didn't know tmpgenc still existed. The NTSC DVD isn't 29.97, it's 23.976 (with 'soft' pulldown flags).

I'd use VirtualDubMod (yeah that's pretty old too), load the .VOB file directly, trim it to the scene you want to edit, and then use "Save Image Sequence" to output all frames sequentially as lossless PNG (or similar) files.

You can then repaint and re-encode them back to 23.976 video using an AVS script and CCE SP or HC encoder (which is free but good).

If you mean the VHS source which is hard telecined, that requires an IVTC method.

I used:

#IVTC and align frames
TFM(pp=0)
trim(806,0)
firstdup=trim(0,-1) #duplicate first frame
lastdup=trim(334,334) #duplicate final frame
firstdup+trim(0,334)+lastdup #add extra frames to improve decimate pattern match to DVD
tdecimate(ovr="DecimateOverride.txt") #remove duplicate frames with override list

#Override file only contains:
#4 -
#148 -

Seriously, I would love to have this done properly, but I'm too impatient. If you do succeed in recreating this scene from scratch I'll definitely watch it. I'll be uploading the capped clip this weekend.

Edit: Btw, I've seen mentioned that the PAL version floating around is a DVD9 to DVD5 conversion. I doubt it since the NTSC disc is a DVD5 as well (and nearly as badly overcompressed).