In this paper, dynamic rate shaping for H.264/AVC intracoded video streams is investigated. An analysis of the distortion distinguishes different error components that lead to the degradation of the output video stream. Experimental results show that the propagation error due to intra prediction has a major impact on the visual quality. This results from the highly increased number of dependencies which are invoked by the H.264/AVC intra prediction. In order to eliminate the propagation error, we propose to use single-loop compensation techniques. Both objective and subjective results show that the compensation techniques highly improve the visual quality.