Great to see the project coming forward, awesome job Harmy. The latest workprint as well as the 2nd version of the trash compactor scene both look awesome.

As I have some spare time at the moment I would be glad if I could help you out with the encoding. Starting from your lossless avi you should create a sample first so that some test encodes could be made to determine settings needed for a transparent encode. The sample should represent the whole movie, so usually you'd use something like 24 frames of each minute of the movie (just an example).

I would use x264 as the encoder for both AVCHD and mkv as it is the best AVC encoder available qualitywise. It can also create Bluray compliant video streams. If the encoding settings are carefully chosen it won't be a problem to import the movie stream into your authoring application to create menus and author the disc.

I could give you a more detailed guide and do some test encodes for you if you want.

Regards Jan