Is the problem only with avsedit or other apps ? Try to open the script with virtualdub for instance. I bet you miss an YV12 decoder, like Divx or Xvid codec. Install one of them.
Note :
1/
NEVER resize before using blindpp
2/ better not magnify the resolution (your source is smaller than 704x480, isn't it ?
)
3/ should not add borders before to apply filters.
I don't know where you found this script but it'd better to look into the 'optimal script' or 'avi->kvcd' sections of the forum to find lot better ones.