Getting green screen flash (screen shot attached) when editing AVCHD

Here is some background info:

I am attempting to edit some footage taken on a Canon HD camcorder. The file was transferred to my macbook pro (OS X 10.8.3) via SD card and it showed up as an AVCHD file. It was one of those pre-packaged formats where you could view all the clips that were on the SD card but I was able to find and extract the one I wanted by doing "control-click, show package contents." I found the one I wanted to edit (clip #9) and dragged it to the desktop. It is a 6.72 GB file: One of my recitals which I'd like to splice up and post on YouTube. It says it is now a quicktime movie and the file & extension is "Clip #9.mov" It plays back just fine and looks very clear when I double click it and it opens in quicktime player. I imported into iMovie and selece the "move file" option rather than copy. It moves it and after some processing it shows up in my event library. When I play it back in iMovie it does a quick flash of green ever few seconds. The flash is only for a split second. See the screen shot below for what I am talking about. What baffles me is that it plays fine when clicking on the original file and it opens in quicktime. The format is H.264 and FPS is 29.97.

I've tried using MPEG Streamclip to change formats and it does the same thing. In fact, it even does the green flash when I just try and view the file in MPEG Streamclip...strange. I've also tried editing a short portion of the video in iMovie and exporting it as a test to see if this was just some playback issue that wouldn't show up in the final video, but it sure did!