Think I found it.
What do you have for your transcoder directory in PMS Settings -> Transcoder -> Transcoder temporary directory?
If it is E: try E:\ instead (then restart PMS).
If I set mine to d:\, audio transcodes OK.
If I set mine to d: (no slash), I receive the “Conversion failed. A required codec could not be found or failed to install” error message.
Note the error message @pl_5309 found:
Error creating directory "\\?\E:Transcode\Sessions......
When transcoder directory is d:\, my logs have:
Job running: EAE_ROOT='\\?\d:\Transcode\Sessions.....
Note the slash after the drive letter.
When transcoder directory is d:, my logs have:
ERROR - Error creating directory "\\?\d:Transcode\Sessions