There's a post in the Mondo Macabro thread at blu-ray.com that goes a bit more into detail. Still scanner noise but it can be made to look a lot better than what we've been seeing from them in general.
The reason it looks the way it does is because I rejected the original transfer that arrived for this film (powdery-looking grain owed to noise reduction to try and reduce the noise produced by the telecine). I was then supplied with the raw, graded but un-processed output that had been scanned in the months before, and I re-did the post production myself without the noise reduction. I did use other frequency shaping techniques to solve the CRT noise problem but those don't compromise the appearance of the film grain.
In other words, for the final version that made it to shelves, LVR did the original scanning and color grading, but I took over everything after that. Given the improvement in quality, this was enough to convince Mondo Macabro to release on BD instead of just NTSC DVD.
I haven't seen it for myself but The Slave has been getting good reviews for PQ. The question is, if Bill can't do it himself will he shell out to get it done or even think it's worth it?