When using XLogo you can vary the amount of blur. But, as I said, I don't use it so I haven't played with it.
Using LogoTools I mentioned you need the logo with a black background. You don't have one in your sample. Every mask I've ever made was black and white so I don't know for sure whether or not having the green part messes it up because I work with black and white films. From the LogoTools_help.rtf:
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Notes: The logo needs to be in a compelely black frame.
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