Tvheadend

I setup my first Tvheadend server earlier this week but I'm having a problem with recorded shows having blocking/pixelation and skipping sound. I do not see this when watching live. To isolate signal I have been testing with the strongest channel I get. Any idea on what could be happening? I'm going to run some tests with the VM running on the SSD to see if it is a hard drive performance issue. I have also copied the recorded files to a local machine for playback testing, but it did not help. I did switch from MKV to TS for recording and that helped a bit. Here is my setup which is running in a VMware VM:

Physical:
Intel Core2 2.4GHz Quadcore
8GB ram
120 GB SSD (boot)
320 GB 7200RPM (dedicated for VM files)
Windows 7

Virtual:
Ubuntu 12.04
Dualcore
2GB Ram

Tuners are HDhomerun.