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Your problem is using a 340kbps WMV's and trying to convert to MPEG-1. You are using lower quality and trying to produce a high quality MPEG. That's very difficult, if not impossible to do. It's like trying to take a small image and blow it up into a larger one of high quality.
You need to have your settings at an 800-1,000 kbps in order to produce a decent MPEG-1.
I use TMPGenc. You need to use 2 lane audio encoder. Install it and define it as an external encoder in your options. You won't have sync problems and it's much more efficient. It will reduce your rendering time by around 50%.
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