How much Time Stretch are you applying?
After applying Time Stretch, did you Render your Timeline for smoothest playback?
Also, what model of camcorder did this video come from and what format and resolution is it?
When you started your Premiere Elements project, which settings did you select?
If you are using non-camcorder video or you haven't properly set up your project, it could lead to the issues you're describing.
Also, how much did you slow your video?
I use a JVC Eviro camcorder. I have never had this problem before, and I dont use anny unusual settings. Every thing normal. Nothing new. Kinda wierd it came so all of a sudden :/
With an Everio? You've never had to render your timeline before? I'm very surprised to hear that.
And what happens when you do?