Compressor presets making m2v file too big

I am on fresh install of tiger fcp suite, all up to date. I use DVD best quality 120 min preset and it spits out a 5 gig m2v. I try to set my own custom setting with exact bitrate to maximize quality and use up disc space, never exceeding safe levels. and it creates file smuch bigger than compressor 1.2.1 did with same settings.

I've just completed my third attempt to encode a 1h57min video using the following settings, based on the DVD Best Quality 4:3 factory presets.
- Avg Bit Rate: 4.6 | Max Bitrate 7.5
Result: M2V file too large (> 5gb!)
- Avg Bit Rate 4.6 | Max Bitrate 7.0
Result: M2V slightly smaller, but still too large (> 4.8gb!)
- Avg Bit Rate 4.0 | Max Bitrate 7.0
Result: M2V file still too large, at 4.72gb!
*Again, these file sizes are the M2V files BY THEMSELVES!*
BTW, I used a trusted bitrate calculator to get the 4.6 avg bitrate reading for a 120min video. I've also used that bitrate without issue in Compressor 1.
The source is an 8-bit Uncompressed video timeline from FCP 5.0.2. There are no cuts in the timeline, as it was digitized directly from the source and placed on the timeline to be encoded with chapter markers in place. The only image transformation within Compressor set to occur is the cropping of the bottom 2 video fields to comform the 486 lines to 480.
This has wasted THREE days of my time. And in all cases, the estimated file sizes reported by Compressor 2 has been grossly inaccurate.
How am I supposed to work around this without churning out video that looks like utter crud???
I've already had to drop my Avg and Max Bitrates from 5.0mbps to 4.0mpbs, even though Apple's preset for 120 minutes Best Quality lists 5.0mpbs with a max bitrate 7.5mbps. If the Apple presets aren't even working at this, clearly there is something wrong here.

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