Encore even stops with encore-transcoded files…
There are several codecs installed an my system (main concept, matrox digisuite, DivX, Xvid, etc.), but none of them is corrupted.
Try to generate a two-layers image in Photoshop (720×675). Use the above layer for your letterbox-stripes and leave the rest transparent, without generating an extra alpha-channel. Save as PSD. Import only the letterbox-layer into PPro and put it into the timeline – this works fine for me, but needs some rendering anyway.