Hi - I don't have a solution to your problem, but wanted to let you know that in June I had a very similar experience. I was given footage shot on a Canon XLH1A, shot as DV 4x3 in the "30p" mode and it was the weirdest looking video I have ever seen. The first time I played a clip back, I really thought something had gone wrong on my settings. I spent several hours, like you, trying to figure out what the proper settings should be. The clips came in as 720x480 DV/DVCPRO-NTSC, with NTSC-CCIR601 Aspect and lower field dominance, 29.97fps - so they should be already to go, and I matched the sequence settings to the clip settings. BUT the video has the most peculiar visible interlacing, which is acerbated by camera or subject motion. I never got it to where I was happy with it, the only thing I can say is that if you look at it on an NTSC output monitor, it looks a little better than the FCP edit monitor.
The video had been recorded on a Focus Enhancements FS-DTE unit, so I don't know it that was part of the problem or not.