Thank you for the response and suggestions. Here's what I've found:
1. I removed the audio files (3 partial songs) from the pds and got the same result (stalled at 25%)
2. I then split the pds into two separate projects. The first pds is from 00:00:00 to 13:00:00. I chose the 13th minute as this was approximately where the encoding process had been locking up. I was able to successfully encode this section.
3. While encoding the second section, the process locked up at approximately the 34th minute. I further split the second section into two other projects and was able to successfully encode these two as well.
So basically, its not the audio files causing the problem. And there's nothing at all special about the two places in the video where the application locks up during encoding (no audio, subtitles, effects, etc.) It appears to have something to do with the lenght and/or size of the video in that my PC's CPU/GPU can't keep up with the encoding process.
The problem again is that if this is the problem, I'm working with a laptop and therefore am unable to upgrade the graphics card.
Any other advice would be greatly appreciated.