I also echo John's question - DVD or BD (your source footage is 1920x1080 so it could be either).
It would also help to know your frame rate & transcoding settings as well. Why? Because you may well be scaling and/or frame rate converting at the same time as data rate reduction - this would easil;y explain the long encoding times. Trust me on this, encoding for BD can take days, not just mere hours, depending on source footage.
Also, dip to black & cross-dissolve transitions take time - if you really want this sort of thing then I would recommend building the slideshow section in Premiere instead, and rendering this out as a video file with audio stream (elementary streams) and using from this state - always try to avoid using Encore editing tools as they are there for emergency only.