Once I have created a DVD image in Encore I select the Blu-ray output and create a Blu-ray image. No change whatsoever is done to the projects content. I have noticed a couple of times that at some point during the film, the audio on the blu-ray copy only with lose and then stay out of sync.

The DVD copy is fine as is the project timeline in Premiere, as is the Monitor timeline in Encore.

Anyone else had this problem?

Best is to make a seperate BD project and burn from there.

Dan...
The only way to monitor your synch, is to mount your .ISO image as a virtual drive. I personally use Daemon tools for this...
In this way, it's considered a Bluray/DVD, and your software will load up, and playback the content..If at this point, there's synch issue, then i'm sure it's at the authoring end..
If there's NO synch issue, then it's your settop player that's the culprit.

After I had created the DVD and Blu-ray images I did indeed ire up daemon tools and sure enough the DVD was fine but the Blu-ray suddenly lost sync but a couple of seconds halfway through.

Normally I would of course suspect an error on my part during editing but the time line is 100% OK, as is the DVD image, just the Blu-ray image is with the problem.

Okay, this is how i would do it...

.M2V and .AC3/WAV files for assets for my DVD project..
Create a new Bluray project from your DVD project. Replace the .M2V with an .M4V.

Reauthor..

Sometimes you can't create a Bluray from an existing project.
Therefore, start it from scratch...