When I move to a new room in the Victory or click on something that opens up an FMV, the screen stretches or contracts vertically and the game will not allow me to do anything for a couple of seconds, then it re-orients itself and I can continue. I am running Windows 8.1. Has anyone else had this problem and could you help me fix it? Thanks.

From what I understand it seems your display is re-adjusting to accomodate resolution changes.
Setting a fixed resolution and selecting a different display output other than surface in Dosbox may solve this.

I mitigated this by changing to OpenGL mode; the screen flickers but doesn't pause as such. Less annoying.

Or, try windowed mode.