Converting M2TS files with mixed audio doesn't work properly

[ChrisJenkins]

I have a (large) set of M2TS files that Handbrake will not convert properly. The issue seems to be that the primary audio track switches between regular 2 channel stereo and 5.1 encoding (and back agaion) a number of times within the file. Handbrake converts the file withiotu crashing but the output file only has audio for those sectiosn that had 2 channel stereo in the origianl. The rest of the file (the main part of interest) has no audio. VLC (2.0.1) also has problems with these files - it crashes when it tries to play them back and there is currently an open bug on this logged with VLC.

I have tried with a very recent nightly build (HandBrake-4599svn-MacOSX.6_GUI_x86_64) as well as current release build 0.9.6
The problem has been observed on both Mac and Windows
OS X 10.7.3 and Windows 7 Professional SP1 64-bit
Problem is 100% reproducible

A small (136 MB) example of a file that shows the problem can be downloaded from here:

http://dl.dropbox.com/u/6635867/BBTSmall.m2ts

A full activity log for the encode can be found here:

http://paste.handbrake.fr/pastebin.php?show=3127

Thanks,

Chris