I used Handbrake to encode the original 4GB MPEG2 file using the 'HQ 1080p Surround' preset customised to 25 fps with a Rate Factor of 20 and 2 passes. I wonder if the Premiere Elements 11 'HDTV 1080p 25 High Quality' MP4 preset uses a Rate Factor of 0, which would explain why it produces a much larger file than the original.
They warn that an H264 Rate Factor of 0 "means lossless and will result in a file size which is larger that the original source unless the source was also lossless". The help notes with this explain the importance of choosing the appropriate H264 Rate Factor when saving MP4 files. I've seen the posts about writing custom presets but haven't tried this. There is a way of doing this in Premiere Elements 14 which Steve Grisetti explained at.
There is a Custom preset in the AVCHD Advanced menu but I can't see any means of adjusting it.
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