Panasonic TM-300 Highest Possible Import/Export Settings

At first I thought it was the Panasonic TM-300's recording quality, but when I hooked it directly into my 42" LCD in the living room it came through BEAUTIFULLY. I also see tons of YouTube video's that are supposedly recorded using the TM-300 and cut together with FCE, so I'm certain it's my own ignorance causing my problem.
It could be some type of import setting I have on FCE is causing me to have a grainy image.
*Can somebody let me know the import and export settings I need to use to get the highest possible quality?* I don't care how big the file is when it's done... I'll buy a whole shelf of hard drives if I need to. I want Scorsese like quality...
Panasonic TM-300 has the top end capability to record in HA60i/24p - 1920x1080 - AVCHD and that is what I am using.

"Where are you seeing this blockiness exactly? In the viewer set to 100%? What are the exact item properties of your clips?"
Can you answer these questions? Are you only talking about the blockiness on exported files compressed on YouTube?
You're watching this fullscreen? How big a screen? How big is the exported file? This is very heavily compressed media. Compressed on export and then compressed again by YouTube. Any gradient, like shadow areas, will show artifacting. The second video is really soft, which masks a lot of the artifacting, but produces an image with a lot of ringing around the high contrast edges. It's been compressed pretty well considering the contrast and depth of the shadow. It looks as if it's been purposely black crushed, but that may just be an accident of the lighting.

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