If you’re following this and have had the same issue, I now have the downlow thanks to Robin Henson at Rivergate Software, the developer of BluStreak Tracer.
Basically after a few days of trading emails and code peeled out using BlusStreak, we’ve determined that when Adobe added Blu-ray functionality to Encore, it would have been a massive undertaking to write the code to have Preview run in a reliable WSIWYG mode like it does with DVD. So hence, Preview isn’t reliable at all for Blu-ray in Encore. There are other issues we discovered, basically with Encore’s highlight colors. Having Encore use it’s Menu Color Set will pretty much screw your menu colors (although they will look right in Preview). Set Encore’s menu colors all to 0 and use your own colors in your chosen menu editing app.
Okay, hope that helps!