This was the problem. The scanner goes line by line through the m3u file “validating” the path. I thought firefly would just serve up the m3u file, but it actually serves up all the files in the playlist.
2008-01-02 13:11:48: Playlist entry /export/music/playlists/http://www.mynetwork.com/music/rush_bravest_face.mp3 bad: No such file or directory
I have all the entries in the m3u file as URLs so I can use them with other clients with other servers. I guess firefly would have to be able to read them from the URL then re-server them, that looks messy. It looks like I need to go through all the playlist and change the paths.