Okay! Sorry for the countless updates!
Our server should be working to support pseudo streaming and has lighttpd set up.
We're still having the same problem, though.
Might it be an issue with not having the 'length' set in the XML code? Or with the FLVs not having metadata (I'm still not sure if they do have metadata or not)?
Is it something with lighttpd?
The guy at the server thinks that the http.startparam settings you listed are CDN setups, which he says our domain is not set up for.