Please go to 'Media Devices' and double-click the device in the list and on the Performance tab set the maximum bitrate to a very high value so that it will not get hit and trigger transcoding. The iPhone will record the video with a very high bitrate so streaming this file from the Mezzmo server to the device over wifi may be too slow and this is why transcoding to a lower bitrate improves playback, the problem is that transcoding is changing the container to mpegts which results in 8Player displaying the aspect ratio differently and uses mp2 audio which does not appear to be supported by 8Player anymore. As a test you could try editing the profile to turn off encoding for mpegts:

<avcontainer id="mpegts" name="mpegts" mimetype="video/mpeg" encode="0" supportschunked="0" >

and set matroska as the default format:

<avcontainer id="matroska" name="matroska,webm" mimetype="video/x-matroska" encode="1" format="matroska" supportschunked="0" level="30" preferredtranscoded="1">