Joe,
Do you have another SB (like an SB2)? If so, does it work (preferably using the same settings as the other SB)? I think the first rule of debugging is to start with something you know works. Create a directory with a small amount of songs (say, 10). Then change slimserver to use that directory. Does this work? If you use the same drive, and this works, then you know it's not related to the drive being full. Perhaps you've run into some limit in slimserver/squeezebox concerning how many songs you can have. By the way, that's a lot!