Get a $15 firewire card for your PC, capture from the original tape and edit from there.
To continue the analogy, you now start out with $ 144, spend $ 15 on a firewire card, you still have $ 131 instead of the $5 in your original work flow.
The alternative you may try, but it could be hit or mis, is to copy the VOB files to your disk, rename them to MPG and try to edit these, but that is a last resort IMO.