Thanks for your reply. It's a little embarrassing, but I can't recreate the problem again.
Here's the situation where the problem occurred before:
I edited a project with AVCHD clips, started the Media Encoder, came back in an hour and the AME had aborted. I scrubbed the time line and PPro froze at a boundary between two clips. I force quit PPro, relaunched it and PPro froze at the same point. I force quit again and relaunched. This time I trimmed one of the clips at the boundary and had no problems.
Today, I re-opened the problem project to get the sample problem clip. I removed the trim and this time had no problem scrubbing or encoding.
I now don't know what caused the original problem. Perhaps, I should have re-booted OS X after the original PPro hang. That's the only thing I know has changed between then and now.