After two weeks of trouble I found this software: voltaicHD. This makes the process simple, well worth the 30 dollars. No plug ins, updates or anything else from third parties are needed, just voltaicHD. Once converted it is then possible to edit in VS.
http://shedworx.com/
Converting AVCHD to wmv
Moderator: Ken Berry
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JimmyB7
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Why Convert?
I've been editing with raw AVCHD files in VideoStudio 11+ as is. What would be the advantage of converting to WMV? 
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sjj1805
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Link included in ThirdParty Commercial Software for Intervideo-Ulead products
AVCHD to wmv
So have I. The problem was to convert to wmv for you tube. Had major difficulties with this. I expected VS to be able to do this with a few key presses, but it needs extra third party plug ins and then more fiddling around. I would not exactly say I was misled by the VS descrition of its capabilities or lack of them, but they are certainly not crystal clear.