I've had the same issue with thumbnails taking forever to change to custom.
So what I do is time it so I'm right at the computer when it finishes processing. As soon as it says done (and I mean as soon as), go to the little public/private icon on the video in the video manager (have the video manager open in another window). Click it.
That'll take you to where you can change info/upload custom thumbnail, tags, etc. If you do it this way, the custom thumbnail option will be there right away. No stupid waiting for it to materialize. Upload that motha as fast as you can! lol
Doing it this way hasn't failed me yet. Instant custom thumbnail.
Sometimes it takes forever for the thumbnails and custom option to show up if you wait on it in the original upload window... by then it'll be too late. So I definitely suggest the route above.
Otherwise it could take up to 24 hours. And that's balls.