Thanks.
1. As you have discovered, nothing obvious points to what is causing the problem, so digging deeper is needed.
2. What is the peak bit rate of the files?
3. Just for clarification, what is the GOP structure?
4. Are the combined file sizes too big for the project, i.e., is there any chance you are trying to put more than 4.7 GB into a single-layer project?
5. If you set the transcode settings to "Don't Transcode", what indications are you getting that Encore is transcoding the video assets?
6. Just for fun, please try changing the extensions on the files to .m2v for the video and .wav for the audio. Don't make any other changes to them and then try them again in Encore.
-Jeff
The Focal Easy Guide to Adobe Encore DVD 2.0