Hey! Guys,
You might wanna try this tool "videozip", its pretty cool. I had similar issues with MKV formatted files and I tried this tool with AVI conversion and it worked great!!!
Cheers!!!
*www.videozip.org/mkv_to_avi.html
MKV Converter - convert MKV to AVI WMV MPEG MP4 MOV iPod 3GP FLV Apple TV
MKV file is new container formats similiar to .AVI. It can contain DivX, Xvid video, OGG audio, several audio tracks, switchable subtitles. But if you want it to play it on a standalone dvd player with divx/xvid support you must convert it to AVI with MP3 audio and text subtitles(if any). VideoZip Pro is designed to meet all your needs of convert file between MKV, OGM, AVI, WMV, ASF, RealVideo, MPEG, MPEG1, MPEG2, VCD, SVCD, DVD, MP4, FLV, 3GP, QuickTime formats. Extreme fast conversion speed and friendly user interface let you convert video files between many formats with ease.