I had a similar problem, see thread: Not actually Pegasys' fault note the entry: At this point, I contacted Pegasys Inc. Turns out that Cyberlink has changed the specification, and so their mepeg-2 decoder no longer works with Tsunami. However, the following workaround does the trick: Load TMPGEnc, but do not open the mpeg-2 file. Open the file with Windows Media Player, run a few frames and then pause it. Leave WMP open, and then the mpeg-2 file should open in TMPGEnc without problem. WMP opens the file with DirectX, getting round the "overlay" output method.