I seem to have discovered the problem. My shared files are stored on a separate disk partition.

It seems that LW was choking on the system-created "lost+found" directory in my shared directory because it did not have search permissions.

I added search permissions to "lost+found" and everything is parsed ok.

It's a bit strange - when I create other directories without search permission LW behaves fine, it is only the combination of "lost+found" and 700 directory permissions that cause a problem.

--jth