lots of visual static with movie

I'm trying to view an avi that was encoded with DivX 3 Low-Motion and AC3. I can view the movie with DivX Player 2a, but I can't get any sound. I can hear the movie with different versions of BSplayer, but the picture is mostly red static with the movie playing in real time flashing in between frames of this red static. You can't really watch the movie this way - you're only seeing "shadows" of the movie. I get the same results with different operating systems.

I've tried about every combination of video settings using BSplayer, but nothing seems to work right. When trying to use the overlay feature (Mode 1), it produces an "overlay failed" message and then plays the movie with all of the static.

Any ideas?

Thank You