Having the same problem with Harry Potter 1. Blue ray is in 2.40:1, after BR->DVD the aspect ratio is 16:9 with vertical stretching in both VLC player and DVDFab mediaplayer.
On a side note, in the title selection box in DVDFab BR->DVD, the aspect ratio is showing up as 16:9. The title is anamorphic widescreen, not letterboxed, so the image data isn't actually 16:9. Apparently, it's reading the ratio incorrectly and converting to what it (incorrectly) thinks it should be rather than what it actually is.
[edit] On a further note, I loaded up several other Blu-ray titles, and every single one was listed as 16:9, regardless of their actual aspect ratio. Also, I loaded up a widescreen DVD into DVD Ripper and all the titles listed as either 4:3 or 16:9 despite the movie being neither.
