People often get tripped up at step 4.
You're better off upgrading your hardware to something that will work with the native media.
What usually goes wrong at step 4?
I'm afraid that there is no way that I can upgrade my hardware, so I need a workaround...
Try your own suggested workflow for your self.
It an work fine but of course its time consuming to create the proxy files and can be cumbersome conforming them back.
Use some sort of TC in your workflow. eg paste TC to your proxys.
Thanks, I will do - I'm assuming TC = Time Code?