I am pretty certain its not the source footage as I contacted Canon first and they advised me to connect it to my TV via HDMI and it plays lovely. You are correct though I dont want to blow any money only to discover it doesn't solve my issue. I am so frustrated. I have all the codecs, my cpu is only running at 60% when playing the footage and as I said before my gpu card is at a happy 50%. I did strangely enough download a canon 550d mov. file of the internet and that played fine which is why I first believed it was the footage created in my 700d.
It seems to me that it's the specific scenerio of panning, combined with playing on your monitor. Just for laughs, hook up your TV your PC and play it through there. Does the same thing happen? What does it look like on the final export (not on the preview monitor) when viewed on a TV?
That was my next step tonight. I was going to go through my usual work flow that I usually do with my AVCHD files. That being a bluray disc as final output. Its just so frustrating as canon dslr files should play on my pc. The best output so far is if I de-interlace the footage when I convert the file into a different wrapper. I will see how I get on tonight.