In my experience, if you are trying to preserve the audio as PCM on a DVD, you will be sacrificing space for the video. You would be better off going with DD audio conversion as I have found no noticable difference between this (at 224/256kbps) and PCM audio (1536 kbps) - it takes less space!!!
You may not be able to tell the difference, but a lot of people -- including myself -- can. I have a $1000 THX receiver and a good speaker system to compliment it. It's pretty easy to tell the difference between the two on a good quality audio setup. I'm not trying to bash on compressed audio formats (768k DTS is actually my favorite format), but nothing compares to the crisp clean sound of uncompressed PCM.
You're right about one thing though, a PCM soundtrack @1536k is not ideal for a single layer DVD. It would be ideal for a double layer DVD though, which is what we're aiming for.