Wirecast recording lagging from a video file source
It sounds like your input is too compressed.  Your current quality level is already below what Netflix uses for their full quality HD streaming and is right around Youtube's recommended settings for final output of video.

The problem is, this is already a very highly compressed level.  Both compressing and decompressing an h.264 file take a lot of processing power.  The more compressed the video, the more processing power it takes.

Since the file starts highly compressed, your CPU has to work hard to decode the video and then has to try to re-compress it for the stream.  If it can't keep up with the frame rate, then you start getting quality drop and lag as it does it's best to keep up with the stream.

Further compressing the source video just amplified this problem, though if you have already pre-recorded the video, why not edit it offline and then export the video so that you can stream it without having to re-encode on the fly?

Wirecast isn't designed for editing, it is designed for streaming.