MKV help,fastest way to convert large m2ts to small mkv file without no quality loss?

Okay I used bd rebuilder, and it works okay, but sometimes i notice flaws in the picture, like un colored segments, and it takes forever from my dual core. I used ts muxer and get perfect picture and good DTS audio, which i burn movie only to 25gb disks. Now I have dawned on downloaded mkv files which are 2 to 8 gb in size, and the picture is as good as the original, probably from x264 encode.

Lately i came across a great program multiavchd, which allows me burn 2 to 5 movies, from the downloaded mkv files to one 25gb bd-r, without no loss in video quality from original.
The only problem is some mkv files weren’t compliant and i got no video from them. Any way to convert them to make them compliant or to shrink down my m2ts files from a actual real movie disc to mkv x264 so i can put multiple movies on one 25gb disk without loss in video, with dts audio?
Note, I only tested on ps3

The original video is almost certainly in H.264 or VC-1 already, which are top notch codecs as far as quality for file size. You aren’t going to make it 1/3rd the size without reducing the quality.

For non compilant streams you need to reencode.
Each reencode has a loss of quality, even if reencoded file is larger than source
(I don’t talk about “lossless” qp0 h264 encodes).

Most “old” mkv are h264 level 5.1.
They don’t play on PS3 and BluRay SA.
These require Level 4.1 (or Level 4.0, only a matter of bitrate and vbv).

Hint:
Look for RipBot264, reencode to BluRay or m2ts at desired size
and then use MultiAVCHD

Best you reencode direct from original BluRay or Sat-HDTV-Stream, and not from already reencoded mkv
(each additional reencode is a loss in quality)