I agree just use the HDTV or upscaled DVD with real 35mm grain plate for the frames that can't be fixed. I'm glad you have other options for the different obstacles.
Doing the all open matte version is still a good idea since we will never see this version on BD most likely.
Hey Andrea i happened to see this http://screenshotcomparison.com/comparison.php?id=48037
Was this your doing, i'm guessing not since it's 720p?