First off: Garbage in, garbage out. The DVD-R sold by the director himself (signed, even!) is a dub of his personal VHS copy. He makes no attempt to deceive anyone about the quality of this tape, there's even clips of it on the homepage to make sure people know what they're getting. That being the case, the constantly changing aspect ratios were just too much. I'm considering sending him a copy of my reworked DVD for him to use as master for further customers.
I took this as an opportunity to familiarize myself with VirtualDub and AVIsynth (although AVIsynth was eventually not used).
Here follows a general description of my processes.
(These framegrabs (from MPC) are in square pixels, so they look a bit off. They're correct when displayed anamorphically.)
Ripped the DVD (actually not encrypted, so just drag'n drop the VIDEO_TS folder in Explorer.
Used TMPGEnc 4.0 Xpress "Source Wizard" to extract the .MPG file.
As you can see, the aspect ratio is all fouled up. God knows why, but the source switched between this, 4x3 in a 16:9 frame (anamorphic) and fullframe 16:9 anamorphic. Only the sections with the mangled aspect ratio had counters on it (about 2/3 of the runtime)
"Raw" video from the DVD:
Ran the Logoaway filter in VirtualDubMod. I had to run two Logoaway filters in succession, one for the top counter, one for the bottom. I only ran the filter in the active image area to not contaminate it with image info from the black bars. The preview function of the filter was invaluable in finding the best settings. The top and bottom filters needed different settings to look okay. I found the "UGLARM" setting at max to be the best, YMMV.
I chose to apply the filter before resizing, as I believe this was the fastest way, leaving it a smaller area to rework. If I resized the image first, the counters would take up more realestate as well, leaving a bigger area to process for the filters. Furthermore, I had hoped that the blurring would be a little less obvious if I applied it prior to resizing, and that it would blend in just a little bit better (slightly softer edges to the blurred area after resizing). Not sure it made a difference.
Output to lossless AVI from VDubMod.
Resulting image with Logoaway filter applied:
Cropping and resizing the uncompressed AVI in TMPGEnc 4.0 Xpress, using the built-in Lanczos3 algorithm. I could have applied the cropping and resizing in VDubMod, but I am more familiar with TMPEG and it is WYSIWYG. Resized to 720x480 anamorphic.
Then encoding to MPEG2 using the max average bitrate that would fit a 1h:22m film on a DVD5 (7100mb/s). TMPEG recompresses the sound as well, but I couldn't be bothered demuxing the original file and muxing the 193kb/s stereo AC3 sound back into my re-rendered video.
Here's the final video. It's still mushy VHS, but at least the aspect ratio is brought into check, and the counters are gone. The Logoaway filter does a good job, but I would have liked to see a softer edge to the filtered area.
Final image after cropping of the black bars and resizing to 720x480 anamorphic:
For those who feel the counters were just as well left alone, I give you this screen from my pre-logoaway treatment. Even in motion, I feel the application of the blurring was way preferable.
All in all, a great learning experience, and a big thankyou to everyone who pointed me in the right direction.