Sorry for resurecting this old, OLD! thread, but I found the solution for this issue. First though, I'll say Blood is a bit strange in it resolutions. Most Build games require you to exit the game and run setup.exe/setmain.exe to change reses or press F8 ingame, and even then cycles through a preset of resolutions (320x200, 640x480, 800x600). Blood is different in that it checks all 8-bit/256 color resolutions your card supports and provides you the option to switch to them in-game (the setup exe still uses presets). As @LordGremlin pointed out, only certain resolutions cause this issue: the ones that aren't in the presets. It's also worth noting that if you read Monolith's old patch change files, you'll notice they disabled the ability to cycle resolutions with the F8 key in Blood; aditionally they disbled the intro logos on startup (which are actually cutscenes file wise).
I did find though that if you change resolutions manualy by editing them into the Blood.cfg, it's much less buggy with the cutscenes. It still doesn't solve the flickering HUD though, for that you need to disable the lenear framebuffer with NoLFBLIM or Machine type VESA_NOLFB in the DOSBox cfg. Also for everyone recomending people to change the fullresolution in the DOSBox cfg to achive a higher resolution in game: you're terrible! That only upscales it, not change the output resolution. Edit the Blood.cfg.
Also note I do not have the GOG version of the game, I have the original OU:WB (Score on eBay!) and it it has this issue too, even with the latest DOSBox.
