Strange. Went to test this myself for you. The smartlist I chose had a mixture of images and music... Three times I cycled the steps, and three times, music began playback and MC immediately froze while the music continued... I got three of these:
Description:
A problem caused this program to stop interacting with Windows.
Problem signature:
Problem Event Name: AppHangB1
Application Name: Media Center 20.exe
Application Version: 20.0.108.0
Application Timestamp: 555339f9
Hang Signature: 8be4
Hang Type: 134217729
OS Version: 6.3.9600.2.0.0.256.48
Locale ID: 2057
Additional Hang Signature 1: 8be4dd3da2155d5b9335714e1fedf28a
Additional Hang Signature 2: 18bf
Additional Hang Signature 3: 18bf5318b0b686578c997f22196bfe82
Additional Hang Signature 4: 8be4
Additional Hang Signature 5: 8be4dd3da2155d5b9335714e1fedf28a
Additional Hang Signature 6: 18bf
Additional Hang Signature 7: 18bf5318b0b686578c997f22196bfe82
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C:\WINDOWS\system32\en-GB\erofflps.txt
Must be the images, I thought, or maybe the fact that there are over 8000 items in the playing now list, although the player display never updated to reflect this.
I took the images out. Problem went away.
I put the images back in, problem stayed away.
Maybe there's a bad connection in there somewhere, I don't know. My experience didn't quite match yours in that while MC hung, it did actually start playback, even though it would have stalled after the first track. For now, I can't make it hang again, and I can't duplicate your problem.
I did test though, sorry I don't have anything better to report.