"crappy gout audio"! Digital audio versus digital audio. What did you want? A PCM track? The Laserdiscs had a 16 bit 44.1 kHz soundtrack. D-3 Tape (which is in all likeliness the probable format of the masters) holds audio 16 to 20bit at 48kHz. DVD Video DD standard is 48kHz. You tell me which is the "crappy" audio. "But it's a Dolby Prologic track" - that doesn't matter. Dolby Prologic was designed on and for analogue audio, compression doesn't matter.

Look at it this way: 1. DD AC3 Track @ 192kbps, 2. PCM @ 1.5Mbps.

That's 1.7Mbps. The maximum DVD bitrate is 9.8 Mb/s, therefore your new maximum video bitrate is 7.9Mbps. Yes, strictly speaking it should be 8.1 on a purely mathematical basis, but this is the real world. On the other hand no PCM audio and you can safely set the video's maximum bitrate to 9.4Mbps.