[smp1]

The problem with increasing the arm sdram priority (which is what your setting does), is that if the arm now does a large memcpy
it will dominate the bus and probably cause the deinterlace to be slow and potentially skip a frame.

I didn't notice any frame skips during the playback. The only issues I noticed so far is when I start to record the HD channel - I could get a HDMI dropout for a fraction of a second. Same could happen if I press "codec info" during the playback of a high bitrate 1080i file. But those are very minor issues.

The v3d_limiter setting keeps the deinterlace at higher priority than the arm, so the arm can't interfere, but also leaves gaps where
other users can get in. That would be the preferred solution to get working.

Can this be tested in real time with vcgencmd command rather than config.txt?