I tried that and it still looked the same. I imagine the reason is the game is made for 1920x1080 while my monitor is 1440x900 so its probably blurring more than just a single row from the next frame. I want the game to work on multiple mobile resolutions so that is not really a solution to just keep trying until somethings works on my desktop screen.
I also tried messing around with FlxAtlas and that still looked the same. Eventually I just gave up and now I am using multiple PNG files for each button frame. That is a lot more work but at least it doesn't look bad..