I recompressed the video in vegas, this time lowering the maximum bitrate from 9,500,000 to 8,500,00 and now the video works fine. This leads me to believe it was a bitrate issue (although I still think VLC playing it off my harddrive wouldnt’ care if the bitrate exceeded the maximum for a hardware DVD player…).
The overall video bitrate is still 6,000,000 with two audio tracks of 384kbps AC3. This still has the average bitrate of only about 7MBPS (correct my math if I’m wrong). Ah well.. at least it’s solved.
Mike