I just ran another test by extending the trim from the edit to a couple of frames past the point where the video 'boundary' appears to exist and the conversion now proceeds.
So it's not a show stopper, just annoying.
Incidentally, the machine I seem to have all the problems is a quad core i7. I note from other posts that AVS does seem to be fragile when running on this processor. Another machine I have with a T2600 CPU does not seem to exhibit this issue, it just takes 8 times longer to do a conversion.