Sound problems in video edited with Windows Movie Maker 2

After I use Windows Movie Maker (2.1.4.0260)
to download video from my Sony PC105E PAL camcorder,
I get a 12Gb .avi file with beautifully clear sound.

However, when I edit clips from that file with WMM2,
the sound becomes distorted in the EDITOR video,
with a metallic ringing sound (like clipping or something),
even though the preview of the original video in WMM2
has clear sound.

I'm pretty sure that the problem is that my camcorder
recorded the sound at 32KHz (the factory default I think)
and WMM2 cannot translate this correctly to 48KHz.

GSpot reports that Directshow can play the original
..avi file correctly, which is probably why the preview
of the original .avi file sounds fine.

WMM seems to use the "Microsoft PCM Converter"
audio codec to convert the sound from 32KHz to 48KHz,
so I think it is this codec that causes the problems.
(That codec is the only one that is listed as being
capable of sample rate conversions, and when I disable
it, I get no sound at all in the edited video, while
the preview of the original is still fine).

Questions:

1. Is this a known problem with WMM2?
(That it cannot edit .avi files with audio
sample rates lower than 48KHz?)

2. Is there anywhere I get another audio codec that
will do a better job of converting the sample rate?

3. If there is no better conversion codec, does anyone
know how I could split the audio out of the .avi
file so that I can manually convert it to 48KHz with
a separate program?

Thanks for any help!
Mark