Interestingly, after banging my head against this thing for awhile, I decided to turn off the Mercury Transmit setting and purge the image cache. This seemed to get rid of any visual issues.
There's no telling whether this is the definitive cause of the issue at this stage, but I'm now under the suspicion that the updated Mercury engine (maybe something to do with the "continuous playback" feature recently launched?) has major bugs when displaying pixel motion blending. Has anyone else found this to be the case?
That's a bug I haven't heard of before. Please, please, please file a bug report! Adobe folks need to know about stuff like that so they can fix it. Feature Request/Bug Report Form
You can share files, etc. with them to help demonstrate the issue.
Are you absolutely sure that you have the correct frame rates for your comp and your footage? 25 fps is only one of the 3 possible frame rates for the camera you are using. Check frame rate for imported footage and make sure that it matches the comp's frame rate. Never assume anything.
Yes, the frame rates match. However, even If they didn't, I would probably still be posting this issue to the forums. At this stage in the development of the software, if I'm unable to place a 29.97FPS clip in a 25FPS composition and apply time-remapping without getting severe visual glitches, then the software fails to live up to all the claims of being able to mix and match various formats, something it's always done extremely well. I've been following this exact procedure for a few years, and all previous versions of AE have successfully time-remapped whatever footage I feed it. This appears to be a recent thing.
I have sent a detailed bug report with the project in question collected for further scrutiny. Hopefully we can squash this thing.
I have the same problem, what is it?