16:9 anamorphic 704x480 is supported by the DVD spec. Many websites incorrectly claim that it's not.

Right now it's the most "real world"-compatible way to encode anamorphic content with MPEG2. I can't think of any downside other than misinformed people PMing you to (incorrectly) claim that "you did it the wrong way".

Some non-pro encoders screw this up, but HCenc handles it just fine. Which MPEG2 encoder are you using?

JEDIT: I forgot to mention that the official PAR is 40:33 for both 704x480 and 720x480 MPEG2 streams. All DVD-compliant players are supposed to crop 8px from the left and right of a 720x480 stream prior to stretching, but many don't, as you've noticed. :-/