Scrambled Video Playing mpeg2 Files on Sony TV

Hello. I am trying to capture VHS video (no Macrovision) and convert sections of it to mpeg2 for play on my Sony TV (32"/720) via USB drive (and maybe burn to DVD as well). I have done so many times with other sources (mostly ripping DVDs and converting downloaded youtube vids, etc.) and never had a problem until I tried to capture VHS and convert in this way.

I have tried importing the VHS footage using iMovie, Quicktime and Premier Pro CS6 through an old Canon Optura 50 DV camera, then I would export sections of it using an uncompressed codec (DV), then that file is converted to an mpeg2 file via another program (I've used several that work fine for this stage of the process). This is what I am getting when I try to play the resulting mpeg2 file on my tv set:

Finally, I tried the H.264 codec (for the initial export from Premier Pro) and changed the pixels to "square" and it seems to play ok on my TV once converted to mpeg2 (but I have NO idea why). I cannot get it to work when exported using iMovie or Quicktime (they don't offer pixel ratio adjustment as far as I can see). What am I missing here? Anyone know? Is there another codec I can try from within iMovie or Quicktime that may solve this problem? I don't want to use Premier Pro since the method I described above that worked uses a tremendous amount of time and totally maxed processor power and I have over 100 hours of footage. Why can't I simply capture this VHS footage into iMovie, export in sections to lossless/minimal lossy format, then drop into my other converter to get the mpeg2 I need for the USB drive and maybe burn to DVD? It should be so easy but I am missing some little setting that is screwing up the result and I have no idea what it is. I have done this so easily before using Sony Vegas when I was a Windows user. Any ideas? Thanks for any help.