I am hoping to be able to tell Encore to save its transcodes to a different directory as I can for the cached files. Without this ability, I quickly run out of disc space.
You cannot change Encore's behavior. And Adobe has announced that CS6 is the final version of Encore, so this is not a "feature request" scenario.
Your easiest option is to add drive space.
Another option is to change your workflow so the large transcodes are not done by Encore.
Another option, that I have not tested is to a) let Encore transcode, b) close Encore and then move the transcoded files (m2v/a3c, for example, with their xmp files) to your desired location, c) open the project in Encore, and d) use "locate transcoded file" to tell Encore where they are. If you try this, let us know whether it works.