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Try using MacTheRipper to rip the DVD to your Disk and then process with HandBrake. I'm in the middle of doing the Babylon 5 series myself, I always use MTR first and I can't remember exactly which disk it was now but the one you mention rings a bell. MTR ripped the whole thing to my HD successfully but upon finishing reported there were bad sectors. I checked it out with VLC and it all seemed to play fine so I carried on with HandBrake and the individual episodes turned out fine.
Several months ago (March or so?), I used HB to rip the entire B5 series. I did one episode per file, and didn't have a single issue. I used MTR on each disk and then encoded the ripped version in HB. I did this out of speed rather than out of necessity b/c I could be encoding one disk at the same time I am ripping the next. I don't remember MTR reporting bad sectors though, but I may just be remembering incorrectly as I did 30 disks in about a weeks time.
