Currently using DNG Convert 3.2 and ARC 3.2 on Mac. 10.4 with Adobe CS2

I converted my Olympus E-1 RAW files (ORD) to Adobe DNG files. But when I compare the ORD and the DNG in ACR, the DNG version has matrixy looking artifacts visible at any viewing resolution greater than 100%. At 600% it's scary!

Thinking this must be some sort of compression artifact ( I know it says "lossless" but I was at a loss for explanation.)

I ran the DNG converter (v3.2) a few more times and basically created 3 DNG version of one of the ORD files: no compression/embedded RAW, no compression, & compression. Then brought all 4 files up in Adobe Camera RAW (3.2) to compare them.

Same results: at 100% it's noticeable in the skin tones. At 200% its noticeable in most areas. At 300 & 400% it looks like a maze.

It would be interesting if the same is noticeable with other RAW file formats. Has any one else seen this or can explain?

Thanks,
Joe Jackson

Update to Camera Raw 3.3.