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Tried to convert the blu-ray to mkv and got the following error:

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Debug log started at Tue May 21 03:50:11 2013 , written by MakeMKV v1.8.2 darwin(x86-release)
Using 524544KB for read cache.
001005:0000 MakeMKV v1.8.2 darwin(x86-release) started
001004:0000 Debug logging enabled, log will be saved as /Users/user/MakeMKV_log.txt
002014:0000 Optical drive "DVD+R-DL OPTIARC DVD RW AD-5680H 3AHF" opened in DASPI v1.3 mode.
002014:0000 Optical drive "BD-ROM ASUS SBC-06D1S-U A201" opened in DASPI v1.3 mode.
002014:0000 Optical drive "BD-RE MATSHITA BD-MLT UJ240AS 1.00" opened in DASPI v1.3 mode.
003007:0000 Using direct disc access mode
DAFD=PAAAADAAAAEABDQUEAQEBAQIBDQAAAAAgAAAAAAAAAAA=
DCE=cnF9o5xchCU8ulIzy4U0exCa43i8QszLNoR3F0MGwwLmEp6jF8/fW8kV31YDvnunswUTn3kJOV2HOr9pYypoQFvj5CBjB5AJbmdNZ0f5d4fkg9Ama6WgvqKXPm2eHVkvkFov5Qrjod6SsvONPPHaLrLx390kjBkXLQ==
DISCID=5A4EDF6A80CA9DC501637FB0A626C0595CE6EADC
003307:0000 File 00000.mpls was added as title #0
003025:0000 Title #00001.mpls has length of 64 seconds which is less than minimum title length of 200 seconds and was therefore skipped
003025:0000 Title #00002.m2ts has length of 14 seconds which is less than minimum title length of 200 seconds and was therefore skipped
003025:0000 Title #00011.m2ts has length of 1 seconds which is less than minimum title length of 200 seconds and was therefore skipped
003025:0000 Title #00000.m2ts has length of 34 seconds which is less than minimum title length of 200 seconds and was therefore skipped
003025:0000 Title #00001.m2ts has length of 29 seconds which is less than minimum title length of 200 seconds and was therefore skipped
005011:0000 Operation successfully completed
005014:0000 Saving 1 titles into directory /Users/user/Desktop/BD Rip
001003:0020 DEBUG: Code 1073741829 at 4;[J79B.!rn|1/Lb:29393953
001003:0020 DEBUG: Code 1073741829 at 4;[J79B.!rn|1/Lb:29393953
001003:0020 DEBUG: Code 2 at 5p3{s>qViQf^CV3Q:213137827
001003:0020 DEBUG: Code 2 at 5p3{s>qViQf^CV3Q:213137827
001003:0020 DEBUG: Code 2 at 5p3{s>qViQf^CV3Q:213137827
001003:0020 DEBUG: Code 2 at 5p3{s>qViQf^CV3Q:213137827
001003:0020 DEBUG: Code 2 at 5p3{s>qViQf^CV3Q:213137827
001003:0020 DEBUG: Code 2 at 5p3{s>qViQf^CV3Q:213137827
002003:0000 Error 'Scsi error - HARDWARE ERROR:TRACK FOLLOWING ERROR' occurred while reading '/BDMV/STREAM/00003.m2ts' at offset '16943806464'
001003:0020 DEBUG: Code 1073741829 at 4;[J79B.!rn|1/Lb:29393953
001003:0020 DEBUG: Code 1073741829 at 4;[J79B.!rn|1/Lb:29393953
001003:0020 DEBUG: Code 1073741829 at 4;[J79B.!rn|1/Lb:29393953
001003:0020 DEBUG: Code 1073741829 at 4;[J79B.!rn|1/Lb:29393953
001003:0020 DEBUG: Code 1073741829 at 4;[J79B.!rn|1/Lb:29393953
001003:0020 DEBUG: Code 1073741829 at 4;[J79B.!rn|1/Lb:29393953
001003:0020 DEBUG: Code 2 at 5p3{s>qViQf^CV3Q:213137827
001003:0020 DEBUG: Code 2 at 5p3{s>qViQf^CV3Q:213137827
001003:0020 DEBUG: Code 2 at 5p3{s>qViQf^CV3Q:213137827
001003:0020 DEBUG: Code 2 at 5p3{s>qViQf^CV3Q:213137827
001003:0020 DEBUG: Code 2 at 5p3{s>qViQf^CV3Q:213137827
002003:0000 Error 'Scsi error - HARDWARE ERROR:TRACK FOLLOWING ERROR' occurred while reading '/BDMV/STREAM/00003.m2ts' at offset '16943806464'
001003:0020 DEBUG: Code 0 at 3_]a<dyj.hdS*3<aSB$^:121262739
001003:0020 DEBUG: Code 0 at mh?E|y/J<nxVfKE`>oJX:121261888
001003:0020 DEBUG: Code 0 at 3_]a<dyj.hdS*3<aSB$^:213130743
001003:0020 DEBUG: Code 8273343 at 3_]a<dyj.hdS*3<aSB$^:29393332
001003:0020 DEBUG: Code 0 at [|k`kpmSK/,Lj0PP?Xv.3:121266396
001003:0020 DEBUG: Code 0 at [|k`kpmSK/,Lj0PP?Xv.3:121266396
001003:0020 DEBUG: Code 0 at [|k`kpmSK/,Lj0PP?Xv.3:121266396
001002:0020 LIBMKV_TRACE: Exception: Error while reading input
005003:0000 Failed to save title 0 to file /Users/user/Desktop/BD Rip/The_Godfather,_Part_II_t00.mkv
005004:0080 0 titles saved, 1 failed
005037:0204 Copy complete. 0 titles saved, 1 failed.

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Tried to do this on 3 different drives and I went so far as to return the disk and get another one thinking that possibly the drive(s) were bad. It always fails on the same stream. Any Ideas?

System Specs:

Apple iMac (2012) Core i5 with 16GB RAM
Asus SBC-06D1S-U A201 (BD Reader - External USB 2.0)
Matshita BD-MLT UJ240AS Firmware 1.00 (BD Recorder - External USB 2.0)
OS X Mountain Lion 10.8.3

Thanks for the great product.

Update
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Tried ripping the disc with the latest version MKV (1.8.3) and the same style error occurs on the same stream. I also took the disc and attempted to rip it on a Windows PC using MakeMKV for Windows on different hardware and got the same error generated by the Mac version. Attempted to read the disk with DVDFab and it starts the copy then fails within seconds. I thought it might potentially be a disk issue, even though this is the second copy of the disk from a completely different source, I decided to watch the film in its entirety to see if there were any errors during playback. There were none. Could this be some kind of protection scheme?

Any Ideas?

Vexar01

No, this is a disc read problem. Try copying this file ( 00003.m2ts ) from the disc in Finder - you're bound to get the same error at the same spot (16.9 GB). If this succeeds then it is a bug in MakeMKV, but that's unlikely.

Then is there a command line telling MakeMKV to skip this "bad track"/bad file

If you don't select it, MakeMKV won't try to read it. It's the movie you're trying to rip.

Bad disc. Had that happen with a disc I owned of Gladiator.