Bizarre Banding problem when compressing and AVI

[EDV]

Not sure if the correct term is "Banding" but here it is:

I am using Sorenson Squeeze 8.5 Pro

The original AVI ( rendered from After Effects ) is a 17.5 Gb file. It's clean , no banding whatsoever, but too large to even play on my computer's hard drive so it needs to be compressed.
I want to upload it to a video host, so logically I want the best quality and the lowest file size possible.
Using H264 , X264, Mov, and any other variant of the H264 codec, I tried to produce a "usable" mp4
More than 10 attempts later, this horrible black block covering half the screen shows up IN EVERY SINGLE RENDER, it flashes randomly
3 or 4 times on my rendered mp4, lasting for less than a second, but still noticeable.
Could it be my version of Sorenson Squeeze? Is this a common problem? What is the solution ?

thanks in advance

 

[EDV]

A bit more information. As I said, the AVI is created from After Effects, not Premiere Pro. After Effects gives you a number of options, and I want uncompressed, so I chose AVI.

This creates a huge file, but it's uncompressed and clean. Any reason why I shouldn't render to AVI? I've also tried MOV by the way. Not as large, but still fairly big, and playable from the hard drive.

The Next step is to compress the file, so I go to Sorenson Squeeze. I need an MP4, so I try a suitable MP4 preset. I edit a couple of the options ( in this case Main Concept H264 was chosen ) and it's ready to be used.

I also tried the MOV preset, using x264:

tried other variants but I don't see what I could be doing wrong here!

 

[EDV]

Update: Tried Adobe Media Encoder, using the same AVI, and the recommended Vimeo settings. Same result. Black Banding across the frame.

 

[EDV]

Phew..! Finally! A clean mp4 without any artifacts from Sorenson Squeeze! All I did was change the source file, from AVI to MOV ( codec None ) in After Effects.
I still want to know why AVIs to mp4 don't work though, as I am pretty sure I've done it before.

Also, are my settings okay? 3600 kbps seems like a pretty high Data Rate for a 640 x 360 video, but source file is HD