Ah… good point!
Yes you’re right, I was trying to use the OS HD for project files.
Will an external USB drive work, or only FW800?
Also… while waiting for the replies, I was able to somewhat solve this problem using a very strange work around:
Basically I imported the uncompressed avi into Avid MC5 as a DNxHD 110 X codec… next I exported as QT file…
Then imported that QT file into FCP, and export yet again as ProRes 422 1280×720 HQ – 30 fps
No noticeable quality change (except of course from the original uncompressed avi, but that changed with the dnxhd encode right then and it’s acceptable (hardly lossy). And yet, I am now able to play these new files in FCP normally. No FW800 drive, same exact config.
By taking this measure, am I doing something bad that I don’t know about or see? Why wouldn’t compressor give me a decent file to work with in the first place?
Big thanks again for the help!