I completed the checklist and I'm still having the same problem.
1. The gray tabs of the work area bar DO span the whole timeline content.
2. The content I want to render does NOT have an orange line over its content, however it still lags/stops the footage but keeps playing the audio (not part of the footage) when I play back the video.
3. I want to render everything in my work area. Some content has a green line above, some content has no line above it.
I have my preview directed to save on my LaCie external hard drive. This hard drive is the same device I am storing all my footage that is being imported into Premiere Elements 12 and is the same device I am saving the Premiere Elements 12 project on.