Three hours of AVCHD (which is challenging to work with anyway) is probably too much to work with.
You don't say how much free, defragmented hard drive space you have but, unless it's a hundred or so gigabytes, that too could be a challenge.
I'd recommend doing a test run with 1 hour, or even half an hour, of video -- just to make sure everything is working.
But the fact that when you downconvert everything works fine seems to indicate that you've just overwhelmed your system.
on the c drive there is about 78 GB free, but there is another 200 GB on another drive (E:), but I don't know if Premiere would access that portion.
Also, is there a reason Premiere doesn't save the progress as it goes so it doesn't have to redo everything? Seems like it could segment the work so if it crashes at some point it would only have to redo the segment where it crashes then go on. It takes about 1.5 to 2 days to encode this monster!
Some one recently was trying to do the same as you, export a large AVCHD project to Blu-ray... 1.5 hours in his case. He ran into the exact same problems as you. In the end the only way to do it was to break the video into 3 half hour segments... each in a seperate project and then all exported as H.264 1080i. He then brought these into a new project and burnt to Blu-ray. PE7 can burn a straight file but it overloads when having to deal with mltiple edits, effects, transitions etc.
Well, I finally got it to work. I booted into Win 7 64-bit, turned off all of the screensavers and power savers, disabled the network, uninstalled AVG antivirus and any other program that runs at boot, then restarted. I then started encoding and about 28 hours later a Blu-Ray disc popped out of the drive!
So, I finally managed to encode the whole 3 hour movie at once, but it pretty much took a clean, "dedicated" install of windows. I guess I may need to repartition my drive and just set up a video editing partition that doesn't do anything but encode...
I would strongly urge you to NOT partition any drive. There is nothing to gain, and much to loose. More physical HDD's is the answer.
Here's an ARTICLE on suggested NLE HDD setup. It will give you the ultimate suggested use of HDD real estate.
Hope this helps,
I should have clarified, I guess, but the extra partition would be in place to house an installation of windows with nothing else installed but premiere. Since my working files are on another hard drive, I think premiere actually encodes on that drive. The job I just completed with the 3 hour AVCHD project was compiled on a partition of about 25 GB that housed Win 7 and premiere, which take up about 60% of the free space on that drive.
But basically, this would allow me to dual boot (or triple boot) into either the "encoding" atmosphere or the "everything else" installation.