A client brought me 4 .avi files to convert to MPG2 which I do in Vegas all the time. However with these 4 files I try dropping the .avi onto the timeline and the video comes in fine but the audio only drops in a 3 frame length of the audio. The properties of the file even say Audio length 0:00:00.03 which is odd since when I play the file in Windows Media everything is as it should be.

Bringing the file into Mediainfo I see the video codec is DV(Sony) good, and the audio is PCM(Microsoft), also good. These formats are pretty much the norm for AVI so I'm curious as to why Vegas is only reading the first snippet of audio?

Any ideas?

There could be a corrupt header.
Try rightclick/dragging the file to the timeline, then selecting Audio Only. See if anything changes.
When you open the file in the Trimmer, is there still only a 3 second frame?
It's also possible the header of the file is corrupt and Vegas chooses not to deal with it. Do you have Sound Forge so you can clean it up?

I tried right click/drag and audio only and it still came in as 3 frames. It's not even 3 seconds, just 3 frames.

I tried bringing into SF 9 as well and it reads it the exact same way. On a whim I tried bringing the AVI into DVD Architect to see what it reads and sure enough, 3 frames.

What I've ended up doing is bringing the avi into Adobe Soundbooth, which read the complete wav, and I rendered it out again as a wav only, brought the video of the avi video and the wav in seperately into Vegas, synched them up and voila, it worked.

I'm not a huge fan of workarounds, so that kind of irked me, but I'll be working in Vegas to see exactly why these particular avi audio files weren't read. But I do appreciate your input on this considering you're the Vegas guru. If I find out anything I'll be sure to post.