When creating an iso though, it starts with playlist 501 in the middle of the movie.
You probably mean "CLIP" 501.
You need to understand, that when CloneBD copies to MKV or MP4, it processes
playlists. When it copies the full disc, it processes
clips individually (and usually not in any specific order, that is OK and normal). And it usually starts with the largest clip, which happens to be #501 in this case.
Edit #2 I sent this all over to Elby also via email.
Elby won't be able to do anything about this, this is not their turf, they don't deal in protection removal.
The .iso resultant file begins playing at a scene in a hospital.
You didn't mention, which player you used for playback - and I'm surprised, nobody asked you for that information.
When playing back ISOs (or full discs for that matter), the player is responsible - directly or indirectly - for choosing the correct sequence.
If you played it back on a licensed blu-ray player (standalone or WinDVD or PowerDVD) and the result was jumbled, then we need to look into it (on AnyDVD's side, CloneBD really is innocent).
If you played back with something like VLC, then it's nothing special. VLC dumbly plays either the largest clips first or a random order. It simply can't deal with this type of discs.