What is the bitrate of the HDV source and what rate do you select when burning the standard definition DVD image? Might you reduce the problem by boosting the output bitrate to 9 mbps?
Have you changed your display to an HD one since buying your HDV Canon? Might standard definition videos you created using earlier videocams also look blurry when you display them on the new screen? My experience is that 720x480 that looked great on a VGA display can look fair, poor, or abominable when presented on a large HDTV. Hollywood-type SD DVDs seem to suffer the least. Personal projects in SD I thought looked OK two years ago on a 42" VGA are a disappointment when seen on a 37" 1920x1080p.
Just out of curiosity, did you try burning the same HDV project to an AVCHD-DVD (or even a BD) to see what quality you obtain on a large HD display? If time is running short, and the choice is between: a) a crummy video and a ruined reputation, or b) an HD video and little profit, consider testing an HD version of your project on a "starter" BD player (some SK ones sell for about $250) and give both the player and the BD of the wedding to your client. Anyway, that's just a last resort idea. Good luck.