Edited video quality looks terrible!

I am seriously confused... Take a loot at the photo. On the left is the viewer and on the right is the canvas.

I have filmed with an HD video (5D MKIII) yet why is it, when I edit this specific part of the video it goes so poor quality?

I have changed all the playback settings to full quality and HD. I even tried to export it and it came out poor quality as well!

Befire rendering it looked fine, yet when it has been rendered it looks terrible. When I view it for editing it also looks fine (as you can see) but in the canvas it looks terrible again.

Why is it doing this and is there a way to fix it?

Thanks