Check your sequence for any special effects or filters. Some Digital Juice elements also don't play well with Color. Jpeg images sometimes cause a ruckus. Despite an improved compatibility effort, there are still some things that color just doesn't like. You pretty much need a stripped down sequence.
Make a duplicate sequence, strip it down, try that. If it works, you can always copy & paste your effects & elements on the Color-return sequence. Oh and if your effect needs extra lead in frames, extend the clips a bit since you can't re-extend them once they are baked from Color.