Poor photo quality in iMovie

When I import a still picture into iMovie from either the desktop or from the media library and use it in a movie, the quality of the photo suddenly becomes terrible in both the iMovie preview screen immediately upon import and later in the actual exported movie. 
Here's an example which dramatically illustrates this problem:
Here is a JPEG photo I took at sunset with a Nikon D7000.
The picture is intentially underexposed as it is one of the final shots in a time lapse sunset movie.
Now, here's the photo exported into a 1080p iMovie!
The photo is now horrible!  Gag me!
I've tried various settings in "Export using QuickTime" and the quality does not improve.  From my research, it appears this has been a persistent issue.
Has anyone found a good work around?, or alternate workflow?

Jim
No one asked the ? of the sizes of the pictures
that you are putting into iMovie?
When I do a slide show I use from 1 to 2.5mg.
I go from Photoshop E / iPhoto to a folder on my DT then drag to iMovie without going to iPhoto.
iPhoto is an easy import. I do use it from time to time.
I do not crop, I use iMovie. I find that a better way.
I do not use KB to import. I then change some to KB.
Special effects no more then every 5th frame.I do break that one too.
I also use Toast.It works for me.
Karl-I like that thread- I put that in my iMovie folder.
Woodie
iMac 20 G5 BT AP Rev A / iMac G3 / in the closet Performa 6115CD / ll SE Mac OS X (10.4.4)

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