I've been trying to fix this problem for 2 days. It only started recently so I must have changed a setting or something.
Basically after I drag an imported clip to my time line it's fine. As long as it is selected it looks great. One I deselect it to edit another clip, or render it, it stretches severely horizontally. So all I see is a wide/short rectangle of the clip.
This happens to all formats, whether it's a imported video, image or photoshop file. Everything distorts greatly.