After extensive testing and non-stop rendering over the weekend, I think I have hit on a workflow to eliminate the jerkiness I was seeing with Magic Bullet.
Taking my original 60i video, I feed it into Magic Bullet and allow it to deinterlace, convert to 24p, and output the 24p file. Then I encode that as 24p in TMPGENC with 3:2 pulldown enabled on playback. The trick here is that the DVD player is doing the 3:2 pulldown on the fly. For whatever reason it does this a lot better than Magic Bullet does when it converts 24p back to 60i, actually rendering the 3:2 pulldown.
This eliminated the jerkiness, where you could see the interlacing on playback, but there still is a stroboscopic effect some have discussed. Really, I have figured out that this is really only happening in my head, as I have seen the original video numerous times. Of course I can see the differences! I watched a movie on TV last night and when I really looked for it, I could see the same effect and type of motion. So that's it, I think someone else coming it not having seen the original footage probably would be impressed and wouldn't think anything was out of line.
Total time to render 2:33 video: 14 hours (but the film processing looks sweet and the letterbox is nice and crisp)