Simply, a FLAC file (or, I would imagine, any non-native to Squeezebox music 
type) in a directory which contains a '$' sign will not play on the Squeezebox. 
Looking at the debug logs, the '$' sign is omitted from the command-line string 
which is created to call the flac decoder, e.g. if the directory was 'Bo$$' and 
the file was 'file.flac' then the flac decoder would get the following string 
sent to it "Bo"\"file.flac" rather than "Bo$$"\"file.flac"

To reproduce, simply rename a directory with FLAC music files to '$', re-index, 
and try to play any of the files within it on the SqueezeBox.