Sounds like the director would have the same issue- I think IDVD is the problem, it makes the 16x9 into 4x3 animorphicly. DVD Studio Pro most likely would not have this issue.
Check the DVD Studio Pro specs page to see if 16x9 authoiring is supported, then see about a copy for yourself, it will be worth the investment..
JDS
I know Encore isn't liked by all (and has some issues with QT on some setups in its current version 2.0...) but with Encore 2, I am able to set the 16:9 flag. My workflow:
Results are smooth and I've never had any problems with the disks and quality of the vision. I gave up on Avid DVD as its menu systems were driving me nuts and the extra step through Sorenson + the interlacing issues made me look for another solution. I am not sure what Studio ships with now so maybe its worth looking at an Avid DVD solution again...?
I second JDS - iDVD is probably the problem here. Encore has a free trial version for download if you want to have a look at it.
(edit) reading your post again - not sure if Encore comes in Mac flavor, don't think it does...)
Vote 1 - Dongles.
Export QT ref from avid.
Open QT ref in QT pro.
Save as QT ref
Bring into idvd
Bobs your uncle
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