Don't know how you got your MP2, but it's best if your audio stream is not done by TMPGEnc (The encoder, not the DVD authoring app). It especially hates VBR audio in AVIs and can give you that type of error. But regardless of which encoder you used, it's a good idea doing the audio stream separately.
If you haven't done so, load the AVI in ffmpegGUI (free) and convert the audio to AC3 or MP2, it only takes a few minutes. Use that stream when authoring in TMPGEnc DVD Author. And if THAT doesn't work, there are other things to check. That's my bet, though.