MP4 blocky when re-encoding a h264 source with hardsubs

[Franc[e]sco]

Hello, I'm trying to re-encode a 1080p mkv with h264 video and ass subs to a hardsubbed mp4 h264.

I'm using Xvid4PSP and these are my settings http://puu.sh/KpkN. The bitrate is about the same as the source.

--pass 1 --bitrate 5108 --level 4.0 --bframes 16 --direct auto --partitions p8x8,b8x8,i8x8,i4x4 --subme 6 --me umh

--pass 2 --bitrate 5108 --level 4.0 --bframes 16 --direct auto --partitions p8x8,b8x8,i8x8,i4x4 --subme 6 --me umh

NOTE: I'm using 16 b-frames because I'm encoding anime.

I can't figure out why I get blocky artifacts, especially on dark parts of the video:
My Blocky Artifacts -> http://puu.sh/Kphm
Original -> http://puu.sh/KphH

Can you guys give me some tips to get rid of these artifacts?

[Baldrick]

What xvid4psp version? Try 5.037 if you haven't done that already.

Or try a newer x264 gui like tencoder. It can also burn in subs.

[Franc[e]sco]

What xvid4psp version? Try 5.037 if you haven't done that already.

Or try a newer x264 gui like tencoder. It can also burn in subs.

I'm using Xvid4PSP 5 EVR, which supports multithreading. If the problem is the software, I'm gonna try Handbrake and see if it solves the issue.

[Franc[e]sco]

Yup, using handbrake solved the issue!