I have an iMovie project (stop motion animation). Everything is fine, except for a dark scene. The photos get pixelated and blocked, and really ruined. The original image is very sharp and clear, yet the one in iMovie and the exported video files is ruined.
The original media is not video. Rather, it is a large set of JPEG images (stop motion animation film). The images are 773 x 515 pixels, and very high quality. If it matters, it's being overlaid with M4A audio.
Other video editors (PiTiVi, Kdenlive) don't ruin it, so it's not a general issue.
In the final video: