No better help like self help.
I dug more and found that sometimes encoders put *.ssa or *.ass types of files as subtitles. These are more complex files than srt, although not really necessary.
Still couldn't find codec that will recognize them, but I guess later version of the bsplayer can handle it.
So what I do is the following:
I found free small program called MKVExtractGUI2, and when I use it on the mkv file it displays all the tracks inside, including subs file/s. I extract the one I need, then I open it with Subtitle Workshop, or any kind of subtitles editing tool, and save them as srt file.
And
voilà! I have normal srt that I can use. You can even add this srt to mkv as well, but I personally don't need to do that.
Cheers.
