This is a known issue with many of the R1 Iron Man discs… same with mine
As suggested above by GregiBoy, please rip the dvd to a folder on your hdd…in a dvd to dvd mode and not in a dvd to mobile profile.
Use any mode except clone. You have to reposition the layer break.
Then reopen Fab and convert with from the previously ripped hdd folder.
It should proceed smoothly from here.
Or as Alan suggested, exchange the disc.
There are two threads dealing with this if your interested. Just do a search for Iron Man on the Fab forum.