Poor photo quality in iMovie

When I import a still picture into iMovie from either the desktop or from the media library and use it in a movie, the quality of the photo suddenly becomes terrible in both the iMovie preview screen immediately upon import and later in the actual exported movie.

Here's an example which dramatically illustrates this problem:

Here is a JPEG photo I took at sunset with a Nikon D7000.

The picture is intentially underexposed as it is one of the final shots in a time lapse sunset movie.

Now, here's the photo exported into a 1080p iMovie!

The photo is now horrible! Gag me!

I've tried various settings in "Export using QuickTime" and the quality does not improve. From my research, it appears this has been a persistent issue.

Has anyone found a good work around?, or alternate workflow?