I don't see a problem that would account for that message. Yes, the disk will be full, but it should not push Encore's lower bitrate limit. It is as if somethingis not being cleared from the cache.
So you can try cleaning the cache from within Encore, and also deleting it outside.
That doesn't always fix such things, so I would create a new project with a new name, import the PR sequence and intro as timelines. Import "as menu" your menu from the original project. Link to the chapters but do not set any overrides yet. Add the audio asset and set as the motion. I that is pretty much everything except the overrides. Overrides can be difficult, but they look lke they may be okay. (Except you have one set on the play all that makes no sense to me.)
Grab a screenshot of the flowchart and project panel. Then see if you can transcode.