What format are the clips in the project? HEVC? HDR? Cinematic Mode? An older legacy format, like .avi?
On the available space issue, do you have sufficient free space on your internal drive, where the iMovie app is located, for iMovie to function efficiently? This is different than the available space on the destination drive.
Since you already have tried deleting preferences, you might run though the following procedures to see if any of them solve the issue:
New Project
Copy your media into a newly created project and see if that cures the problem. To do that, do an Edit/Select All, Edit/Copy, of the media in your project and then Edit/Paste it into the newly created project.
Safe Mode
You could also try booting up in Safe Mode (see Finder menu for instructions) and, after everything loads, immediately shut down and reboot in normal mode. Then see if iMovie works properly.
Updating iMovie
To update/redownload iMovie 10, drag your iMovie 10 app from the Applications folder into the trash, but do not empty the
trash. Sign in to the app store and open your purchases folder by clicking on your name at the bottom of the app store side bar. You will see your purchases displayed, including iMovie 10. Redownload/update iMovie from there. If not successful, drag your present iMovie app out of the trash and return it to the Applications folder.
Resetting the System Management Controller
Not sure if you already have done this, but try resetting the System Management Controller (but no longer available for the new M1 computers):
https://support.apple.com/en-us/HT201295
Resetting the NVRAM or PRAM
Try resetting the NVRAM or PRAM:
https://support.apple.com/en-us/HT204063
-- Rich