More follow up in case it helps anyone: I found that if you popen the eps file in a text editor there is a field for each raster graphic that is embedded in the file that says "Interpolate true" change that to 'false' and your problems are over!

Thanks very much, I had no idea the image was rasterized. It turns out that even though I saved the figure in Matlab as an eps, Matlab turns `hi res' images into raster anyway. Thanks again for your help.

Hi! I am having much the same problem now for days but not getting anywhere... The attached file is an svg, that, when I save it as an eps, turns out totally blurry in LaTeX or Preview or any other viewer I have tried. It looks fine as an eps in Inkscape itself. I have not introduced any filters or ...