I've seen the three hour version you are speaking of. Mine is quite different.

My transition between AUJ and DOS is basically just a little rearrangement to make it appear that Gandalf brought the ponies/horses with him for their escape from the goblin tunnels. Then they just head straight to Mirkwood.

I figured out the Orcrist issue, so that's not longer a plot hole. I was totally over thinking it. A very simple edit will make it work seamessly.

It's looking like it might run more like 3 hrs. 15 including the credits. I want it close to 3 hrs. but I don't want to rush it. Pacing is a big focus for me as far as this edit. It's obviously going to have a lot going on plot wise, but so does FOTR and that doesn't feel "rushed"

Thanks for the interest!