If you have hardware acceleration applied, go into settings, video settings, acceleration, disable libstagefright, disable mediacodec, and try and see if that works, otherwise choose software acceleration without choosing multi-threaded decoding.
the key to get this to work is to not have libstagefright or medicodec applied in hardware decoding. If you have to, then apply software decoding without multi-threaded decoding. It might take a reboot for this to work, or simply play a file with hardware decoding and then choose the above settings.
Let me know if that works for you. This also works on the xbmc for ouya application.
after turning off hardware acceleration you will need to re-enable it when playing anything larger than 720p.
I was looking at advancesettings.xml options to see if I could disable hardware for xvid only but I don't see that option, and trying to enable it only for avc, etc did not work. If I could figure out a way to play said files with xbmc for ouya automatically from gotham then I would do that.