Non-standard software needed: Nero 6 Ultra Edition, Exact Audio Copy (with LAME), and sox.

Download the OverDrive audiobook.

In the OverDrive Media Console, select the book and click Transfer/Burn. This will launch Windows Media Player.

In Windows Media Player, choose File > Copy > Copy to Audio CD...

Choose "Nero Fast CD-Burning Plug-in" as the destination disk.

Choose the first part of the audiobook and click "Copy". When prompted, save the file as "Book Title - Part 1.nrg". Repeat this for the rest of the parts. This will take a lot of disk space (almost 1GB per part), but is the only task that needs to be done within the checkout period.

Use Nero ImageDrive to create a virtual CD from the first .nrg file. Use Exact Audio Copy to create a .wav file from the virtual CD. Repeat this for each .nrg file. This will also take a lot of disk space, but you can delete each .nrg file after you have converted it to a .wav file.

Using the MediaMarkers in the OverDrive Media Console, figure out the starting time and length of each "track" you want to split the file up into. For example:

Track MediaMarker Starting Time Length
1 04:24 0:00 4:24
2 09:08 4:24 4:44
3 14:01 9:08 4:53
my apologies, I couldn't figure out how to post tabular data

Use sox to split the large .wav files, like this:

sox disc1.wav "Author - Title - Track 001.wav" trim 0:00 4:24
sox disc1.wav "Author - Title - Track 002.wav" trim 4:24 4:44
sox disc1.wav "Author - Title - Track 003.wav" trim 9:08 4:53

In Exact Audio Copy, create an "Audiobook" profile. I prefer a user-defined encoder with lame.exe as the program, the command-line options "-a -h -V 9 -B %r %s %d", bit rate 64kBit/s, high quality. Save this profile to disk. Leave Exact Audio Copy open.

Drag all your small .wav files onto Exact Audio Copy and let it do its magic, compressing them into mp3 files.

Delete all the non-mp3 files. You're done!