I believe this error had to do with security issues on my PC. I tried many adjustments to my environment over several days of troubleshooting. The last and final adjustments that seemed to eliminate the error were these:
(I switched from Tomcat to Jboss since original post)
Added crossdomain.xml to JBOSS root directory, on my system I put it here:
C:\jboss-4.0.5.GA\server\default\deploy\jbossweb-tomcat55.sar\ROOT.war
Modified my flash settings using this link:
http://www.macromedia.com/support/documentation/en/flashplayer/help/settings_manager.htmlIn this tool, I added my JBOSS Folder to trusted folders.
If you're getting this error and neither of these solves the problem, I'm still betting it's security-related. Maybe someone from LCDS can better address this. I hope this helps someone.