This is indeed a very disturbing issue. I have confirmed the path of messages that you have encountered and am not sure what to make of all this. I had not seen any prior warning of Adobe essentially pulling the plug on early versions. And, I do not see that with my Premiere Elements 2 on Windows 7 64 bit.
For now I am thinking in terms of 2 possible workarounds...
What computer was Premiere Elements 3.0/3.0.2 on before it was used on Windows 7 64 bit? If possible, can you install Premiere Elements 3.0/3.0.2 on its orginal computer to see if you are blocked from using burn to disc there also at this time?
With Premiere Elements 3.0/3.0.2 on Windows 7 64 bit, can you export your Timeline to a .mpg or wmv file? If so, you could take that file into Windows DVD Maker if it came with Windows 7 64 bit. There also may be an opportunity to download the Windows DVD maker.
(See Media Features in "Turn Windows Features On or Off")
We are not Adobe here. We are Premiere Elements users who visit here at our own free will to help other Premiere Elements users. You could contact Adobe about this matter, but, you are most likely going to be greeted with the update message.
Please consider the above and then we will continue to think what next.
To keep confusion down, I will Lock this thread, so that all discussion can continue in the other one - linked from this one.
It is always best to add new information to only one thread, as it quickly becomes impossible to keep track of what has been done, and what has been said.
ATR has kindly reposted his Reply here, to that thread. I will add a link to it, back here, should someone need it as a reference.