well, if avisynth works for you then im happy.
not sure if Vegas internal encoding will be able to surpass x264 quality, rate of compression or amount of tweaking (did you use meGUI? what profile?). but i took your source and gave it a go (i turned on two passes for an extra quality bust), took 6:30 minutes for
this (38mb). not to shabby, but compared to the amount of time you must have put to get generate the shot, 2 hours of encoding is not that big of a problem, and your result is very nice indeed!
note- i'm sure a better encoder could tweak the Vegas encoder to give better compression ratio with out a major hit in quality, but im not. you may consider my Vegas suggestion a proof of concept.
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