It seems the problem is coming when I,m inside folders and letting c2hdr-r working in different levels. Therefore the conversion process works from parent folder. I have to check further. A little busy atm.
*Actually looks like it is only the first file that is giving strange results.
Here is a log from dual iso conversion. Also noticed some strange intermediate issue before it turns into a transcoded DNG (picture).

Log from faulty conversion dng files
Last login: Wed Mar 11 17:23:10 on ttys000
itgusercbook241:~ itguser$ /Users/itguser/Desktop/testMLV\:RAW/cr2hdr-r\ 5.3k_s.command ; exit;
ORIGINALS
MLV Dumper v1.0
-----------------
Mode of operation:
- Input MLV file: 'M11-1138.MLV'
- Convert to DNG frames
- Output into 'M11-1138_1_2015-03-11_0001_C0000_'
File M11-1138.MLV opened
File M11-1138.M00 not existing.
Processing...
Vertical stripes correction:
1.000 1.000 1.000 1.002 0.999 0.996 0.997 0.999
Reached end of chunk 1/1 after 56 blocks
Processed 39 video frames
Done
mv: rename M11-1138_1_2015-03-11_0001_C0000_.wav to M11-1138_1_2015-03-11_0001_C0000.wav: No such file or directory
mv: rename M11-1138.M* to ../ORIGINALS/M11-1138.M*: No such file or directory
cr2hdr: a post processing tool for Dual ISO images
Last update: cc4340b on 2015-03-01 23:16:03 UTC by a1ex:
cr2hdr: fix parsing of --wb options
Active options:
--amaze-edge : use a temporary demosaic step (AMaZE) followed by edge-directed interpolation (default)
--cs2x2 : apply 2x2 chroma smoothing in noisy and aliased areas (default)
--wb=graymax : set AsShotNeutral by maximizing the number of gray pixels (default)
Input file : ./M11-1138_1_2015-03-11_0001_C0000_000000.dng
Camera : Canon EOS 5D Mark III
Camera model : Canon EOS 5D Mark III
Full size : 2048 x 1152
Active area : 2048 x 1152
Black borders : N/A
ISO pattern : BddB RGGB
White levels : 10000 14882
Noise levels : 8.00 8.00 8.00 8.00 (14-bit)
ISO difference : 3.89 EV (1487)
Black delta : 5.26
Dynamic range : 9.96 (+) 10.65 => 14.54 EV (in theory)
Looking for hot/cold pixels...
Hot pixels : 34
AMaZE interpolation ...
Amaze took 0.30 s
Edge-directed interpolation...
Semi-overexposed: 55.57%
Deep shadows : 4.55%
Horizontal stripe fix...
Full-res reconstruction...
ISO overlap : 3.1 EV (approx)
Half-res blending...
Chroma smoothing...
Building alias map...
Filtering alias map...
Smoothing alias map...
Final blending...
Noise level : 8.00 (20-bit), ideally 8.00
Dynamic range : 15.96 EV (cooked)
AsShotNeutral : 0.53 1 0.59, 4793K/g=1.05 (gray max)
Output file : ./M11-1138_1_2015-03-11_0001_C0000_000000.DNG
./M11-1138_1_2015-03-11_0001_C0000_000000.DNG: copying EXIF from ./M11-1138_1_2015-03-11_0001_C0000_000000.dn6
grep: tee: No such file or directory
1 image files updated
find: *.dng: No such file or directory
cr2hdr: a post processing tool for Dual ISO images
Last update: cc4340b on 2015-03-01 23:16:03 UTC by a1ex:
cr2hdr: fix parsing of --wb options
Active options:
--amaze-edge : use a temporary demosaic step (AMaZE) followed by edge-directed interpolation (default)
--cs2x2 : apply 2x2 chroma smoothing in noisy and aliased areas (default)
--wb=graymax : set AsShotNeutral by maximizing the number of gray pixels (default)
Input file : .
cr2hdr: a post processing tool for Dual ISO images
Last update: cc4340b on 2015-03-01 23:16:03 UTC by a1ex:
cr2hdr: fix parsing of --wb options
Active options:
--amaze-edge : use a temporary demosaic step (AMaZE) followed by edge-directed interpolation (default)
--cs2x2 : apply 2x2 chroma smoothing in noisy and aliased areas (default)
--wb=graymax : set AsShotNeutral by maximizing the number of gray pixels (default)
Input file : ./M11-1138_1_2015-03-11_0001_C0000_000000.DNG
Cannot decode file .
cr2hdr: a post processing tool for Dual ISO images
Last update: cc4340b on 2015-03-01 23:16:03 UTC by a1ex:
cr2hdr: fix parsing of --wb options
Active options:
--amaze-edge : use a temporary demosaic step (AMaZE) followed by edge-directed interpolation (default)
--cs2x2 : apply 2x2 chroma smoothing in noisy and aliased areas (default)
--wb=graymax : set AsShotNeutral by maximizing the number of gray pixels (default)
Input file : ./M11-1138_1_2015-03-11_0001_C0000_000001.dng
cr2hdr: a post processing tool for Dual ISO images
Last update: cc4340b on 2015-03-01 23:16:03 UTC by a1ex:
cr2hdr: fix parsing of --wb options
Active options:
--amaze-edge : use a temporary demosaic step (AMaZE) followed by edge-directed interpolation (default)
--cs2x2 : apply 2x2 chroma smoothing in noisy and aliased areas (default)
--wb=graymax : set AsShotNeutral by maximizing the number of gray pixels (default)
Input file : ./M11-1138_1_2015-03-11_0001_C0000_000002.dng
Camera : Canon EOS 5D Mark III
Camera model : Canon EOS 5D Mark III
Full size : 2048 x 1152
Active area : 2048 x 1152
Camera : Canon EOS 5D Mark III
Camera model : Canon EOS 5D Mark III
Full size : 2048 x 1152
Active area : 2048 x 1152
Camera : Canon EOS 5D Mark III
Camera model : Canon EOS 5D Mark III
Full size : 2048 x 1152
Active area : 2048 x 1152
Black borders : N/A
Black borders : N/A
ISO pattern : BddB RGGB
ISO pattern : BddB RGGB
White levels : 10000 14882
White levels : 10000 14882
Doesn't look like interlaced ISO
cr2hdr: a post processing tool for Dual ISO images