I'll still try the MediaCoder stuff out later, but I have to point out that there is a tool that I've finally found that works with my setup AND that works with the embedded subtitle so you don't have to extract them first - Format Factory (
http://www.formatoz.com/). It converted two MKV files properly for my iPhone and did them both in less than 10 minutes. Color me tickled pink (which is slightly rosier than regular pink)
FWIW!