Touching up a vidcap?

Hi there I'm new to these forums

I'm trying to work on a vidcap taken from a rather poor quality video clip. You can download it from here (BMP format).

I tried the simple method (or should I say the only method I know of) of removing the "blocks" - using median, gaussian blur, then finally unsharp mask - but it still doesn't look quite right. You can see my finished GIF here.

By the way, it's supposed to be a guy in a shiny/reflective Japanese samurai-type mask with horns and he's surrounded by flames...

Anybody can help me to make this picture look better?

Well it's going to be tough, but:

Take your smudge tool, and use a very small brush. I mean small. Like 1 or 2 pixels.

And just follow the curvature of the flame and smudge those block-edges out. As I said, this is going to take a long time, but when it comes to something like this, there is no automated process or filters. I've done something similar recently, and it turned out just fine after I got done. I didn't need amazing quality, so I didn't go into extreme depths with it, but if you really want it to look nice, then try this. This will give you very fine lines. If you just find a good point about 5-7 pixels on either edge of the block, and following the curve of the flame, move your mouse back and forth, back and forth......It may take a second to notice the effects, but it WILL do the trick.