I have tried everything including re-grabbing the video for that part and remaking it entirely, but this always happens. What is more strange is that if I play through it once, stop the playback while in loop mode then press play again the frames show correctly, but it I let it loop without stopping before or after the frames work, they stop showing correctly again.
http://www.youtube.com/watch?v=I7-9Eit1orc
exact spot in VS9:

frames are there, they just refuse to play normally

Any ideas?