If anyone else is having this problem, I found this eliminates it, but possibly creates others. More on that later.
Under Video -> General Video Settings -> Video Mode: I selected Advanced>Custom.
The Custom settings I used were, starting with Red October HQ, I added a Type: Source/Splitter, Filter: Haali Media Splitter (the only one I found which tolerated the shared library) for all files. Initially gave it container(mkv);container(avi) as the parameters, but eventually moved to no conditions. This allows the HD files to play over the shared library to the HTPC.
However, it's caused a new problem.
If I'm in standard view, everything works perfectly. Everything plays. Life is good.
If I'm in Theater View, and I select one of the files to watch/play, MC18 hangs almost instantly. No recovery. Regardless of what skin is chosen, the system will hang.
Are there any suggestions on what might be causing that sort of behavior? Something present in Theater View that is not in Standard View?