No. The player is doing exactly what it's supposed to do.
"ive noticed that when i set the fps at 29.97, the file has come out at 29.97 twice, and once at both 29.9703 and 29.9736, thought this might have something to do with the dropped frames?"
It won't always be exactly 29.976.
"is there a tool for locating dropped frames and replacing them?"
It's a tedious process, as I explained earlier. Let's try some other changes first, like what Moth3r suggested.
"What program are you using for capture? It may help to use something that has the option to dynamically resample the audio, so the framerate is fixed to 29.97 and audio sync can be maintained without dropping frames. Check out VirtualVCR."
Agreed. I've not tried VirtualVCR, but I used 3-4 different capture programs before finding one that worked the best. If you are using a video editor like Vegas or Premiere, you might also want to try capturing the audio and video separately, and then aligning them in the editor.