[DeathTheSheep]

In a previous thread entitled "The Coolness of B-Frames," I've outlined a similar problem.

The problem is, extreme blocking occurs in anime encodes with 1 or more b-frames.

Try using 0 or 1 b-frame(s), and set reference frames to 15. You may want to increase the bitrate just a *tiny* bit to compensate for the immediate quantization decrease (no more than 10-15%).

You will see marked improvement, especially if all settings are checked (except B-frame search if using 0 b-frames, which is recommended for anime).

Bi-directional prediction of exteremely fast-moving content (like that Naruto intro, when the clouds are moving at 400mph) or choppy content (such as animation characters, which don't move with the liquid motion of people), tends to be absolutely terrible, even with deblocking, which reduces detail considerably on b-frames. (And I daresay they had reletively no detail to begin with).

Solution: Use max settings with 0 b-frames, 15 refs (or 1-bframe if you're desperate).

Cheers!