is your source a Panasonic camera??.. I have the exact issue when trying to edit video from my TZ10.. my PC plays it with no issues or problems.. PD8 can also play the video with no problems but as soon as I drag to the timeline the video gets a green wash or the top half of the video gets a green wash
I assumed this was some oddness in the Panny AVCHDlite format which is their own standard and is not 100% compliant with the global AVCHD format
Drivers and patches are fine and as stated even PD8 can play the raw files with no issues