Video Clip is Sharp in the Bin, but Blurry When Included in Project?

I have a JVC Everio video camera and iMovie '11.  I'm doing a fairly tight shot.  When I import the clip into the iMovie clip bin, it is sharp. But when I move the clip into the project for inclusion in the final movie, it becomes blurry.  The camera is set to 4:3 aspect ratio, which is the same aspect ratio as the movie. I have unchecked the checkboxes for Image Stabilization and Rolling Shutter in the clip inspector.
How can I get this clip to stay sharp when I import it into the final movie?

It appears that there may be something wrong with iMovie 11's import ability when it comes to the JVC Everio.  If I convert the JVC Everio video using the directions found here, the video comes in sharp.

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