Clip quality gets severely degraded (appears interlaced) upon import?

I am trying to import a clip into Premiere to use in my project but whenever I import it the quality gets severely degraded: http://imgur.com/JHVbl

 

It looks this way both in the preview and after export but it looks fine when I view it outside of premiere. The clip is 720p mp4, the sequence preset I used was AVCHD 720p30.

 

Any idea what I’m doing wrong?

via Adobe Community : Popular Discussions – Adobe Premiere Forums http://forums.adobe.com/thread/1071366