If you have ripped the movies to the hard drive using DVDFab, you should have removed the encryption. DVDShrink should have no trouble working with them, but obviously you are having some problems.
One thing to try is to run the ripped dvd video through a free program called FixVTS, before trying to work with them in DVDShrink. You can find FixVTS here: http://www.videohelp.com/tools/FixVTS
What error message do you get in Shrink?
If you want to try a different program, try the free version of DVDRebuilder. It uses encoders rather than a transcoder like Shrink, and will produce higher quality output. It won't work as quickly as Shrink. http://www.videohelp.com/tools/DVD_Rebuilder