Lee: I had the same problem with my documentary. Did you hear of a "fix" for this? What I did was copy all the clips in my project and paste them into a new sequence. Yeah, it increased the file size. Wish I knew about your process, sounds much easier and less time consuming.
I used a final good sequence to create my DVD via Encore, so I have good master DVD with all the working transitions. My system: Adobe Premiere CS3, Windows XP, 2g ram, 149g HD, 10K processor.