avcHD is High Definition... are you saying you have your Panasonic set to record Standard Definition but with an AVCHD codec?
Instead of configuring a sequence, do the "drag and drop" see the 2nd post picture of the NEW ITEM process http://forums.adobe.com/thread/872666
really, in properties of the file, in the project say:
Type: MPEG Movie
File Size: 29,9 MB
Image Size: 720 x 576
Pixel Depth: 32
Frame Rate: 25,00
Source Audio Format: 48000 Hz - compressed - Stereo
Project Audio Format: 48000 Hz - 32 bit floating point - Stereo
Total Duration: 00:00:26:10
Average Data Rate: 1,1 MB / second
Pixel Aspect Ratio: 1,4545
but the file extension is ".MTS" i think that it is avchd format. I try with change the extension name for .mpg but the problem continue.