Okay, the first major thing I'm running into is, the non-embeddable videos are indeed converting to links, but the link doesn't go a valid URL. It seems to be using the title instead of the URL.
Example
URL:
http://www.youtube.com/watch?v=XZcG0...eature=related
Converts:
YouTube - Boyz II Men - End Of The Road
URL:
http://www.youtube.com/watch?v=jsd0pKGr2Os
Converts:
YouTube - The Jets - The Same Love
Also, the source code in the default YouTube definition is no longer used by YouTube, so not all videos will load in that case.