Before I do this. There is more. When I create the MPEG-DVD files, it creates 2 additional files that seems to corrupt what ever is in that folder. I had to go to another PC on the network to delete all the files to clean up the folder. This is nuts! I was able to import an AVI file into Encore; is that okay?
A Microsoft update KB4013429 March 14, 2017 created issues with the mpeg2 handling libraries. I do not think this is your issue, but some users (in the Encore forum) reported odd and inconsistent behaviors. So it is possible it has added to your woes. I did not see the problem till I tested it in response to reported problems. On one PC, every access of an mpeg file in Windows Explorer resulted in a "silent" crash (explorer just closed without opening the file) and same for Encore trying to import a file. On another PC with the same updates installed, I had no problems.
Some users struggled with removing updates, but this was fixed by a March 20 update, KB4015438.
https://support.microsoft.com/en-ca/help/4015438