According to Vegas Pro 12 Release notes, you need build 486 (or newer):
....
- Added support for timecode in P2 MXF files. If you’re using a project that was created in version 12.0 (build 394) or earlier, please update P2 clip timecode as follows:
If you imported the clip from a disc image, right-click the clip in the Project Media window, choose Replace, and then select the clip from the disc image.
If you imported the clip using the Vegas Device Explorer, delete the .mxf file from the C:\Users\<username>\Documents\Imported Media\ folder and reimport the clip using the Device Explorer.
....

Thanks Mike but Raylight does not work with V12. V11 was the last version supported

Thanks for your reply but im not sure i understand the process, I'm a bit of a novice in this area. The files are loaded directly from the Panasonic camera by just dragging them into a folder in the C:\Videos\My Videos\ folder. I guess I'm unclear what you mean by disc image.

What is your Vegas full version (including build) ?

Open the files in the trimmer and it will show original time code.

OR I think you can go to Tools/Scripting/Add Time Code to All Media for the clips you have on the timeline.

Version 12.0, Build 770, 64Bit

Thanks but that doesnt work. That will add a timecode starting at zero for each clip on the timeline

Vern- I remember having that problem on an older build, but I just checked again on my system (same software build) and it works as I posted. Weird.

Wait…You’re right, it worked! I do see it now. I wasn’t doing a good job of explaining what I’m trying to do.

I wanted to burn a DVD of my video that had a window-burn of the original P2 timecode. Thanks to your feedback I now have that video on my timeline. But now, when I try to burn that video to a DVD, Vegas keeps crashing