That banding looks like it might have been introduced by bad filtering beforehand. Care to share your filterchain? If it was in the source, then you can fix it by using gradfunkmirror or gradfun2dbmod (mod is stronger and will easily kill detail, though, so I'd suggest using funkmirror), which should both come with the latest AMVApp. An explanation on gradfun2dbmod's usage can be found
here, but, again, be advised that it can quite easily kill detail, so you should first try to use gradfunkmirror if you really need to deband.
However, in case the banding was introduced by the encode, then rather than filtering, you should update your zarxgui (you can get the latest
here) and try increasing the aq-strength in the advanced tab.