Seems to be a problem that occurs everynow and them. It seams WMP can see the Codec but TMPGEnc cant. Suggest you d'l the latest TMPGEnc ver 2.52 and try it as its more tuned for AVI than earlier versions.
Secondly, load the AVI file into VirtualDUB, in Audio tab set to Full Processing Made, then in Files tab, select Save WAV... Then in TMPGEnc, select the Audio source as the new WAV file, then the Video source as the original AVI. That works sometimes.