Ok, I think the deinterlacing was the trick. FYI ... there are many settings that if I use them in the Codec screen with DivX Pro, it'll crash the player, but if I use them in Premiere Pro, they work fine. Anyway, I'm re-encoding the full-res video again. My first test came in at 9.6MB with ADPCM encoded audio (no MP3 Encoder is built into Premiere Pro, sorry), but this should be just fine.
In case you haven't figured it out yet, I'm intentionally trying to stick with doing everything in Premiere Pro, so that once we get these little things ironed out, I can just batch process everything else. That's why I'm not taking any suggestions on other programs to do it with.
To answer the question, no ... the original files are on a DVD DATA disc, not a video disc. It's a 200+MB RAW AVI they've given us, so I'm not ripping video.