Thanks again for the feedback.
When I get home this evening going to go ahead and re-install Vegas Pro 8 and use a camera as a pass through. This computer system is running Vista 64 bit whereas my old system was 32 bit Windows XP. This could be a culprit. I tried printing to tape last night and the same signal dropout problem occurs. Very frustrating. It really seems like it could be a 1394 firewire port/driver issue like you said. Will look into that this evening as well. If you think of anything else please let me know.