In my experience, it's almost impossible to solve those firewire conflicts with Canon camcorders, so I would guess you'll need to add a new piece of hardware to solve this problem. You could look into a Blackmagic Design display device. If your iMac has USB3.0 ports, the Intensity Shuttle will supposedly output video through that port, and it's supposed to be compatible with Premiere Pro. The Ultra Studio Mini Monitor is even cheaper, but it requires Thunderbolt, and I have no idea whether you could daisy chain it and a computer monitor - might be worth contacting Blackmagic to ask though. A Thunderbolt hard drive would also likely solve this, of course.
Thanks Zach, I am finding this out the hard way. I called Nitroav tech support and they couldn't understand why it was not working, so unfortunatily for them , It's being returned. I tried another older 8mm camera, but it will not allow "pass through" to the tv even though PPro sees it and will ship a timelime to tape. I'm thinking my best option at this point is to look into the Lacie esata hub. It will take the 1 thunderbolt and give me 2 esata and 2 thunderbolt ports. I'm planing on this. 1 thunderbolt will go to my current 2nd monitor. Then I have an external esata drive that I can use and also daisychain my external fw800 using the passthrough on the esata drive. Could also get the thunderbolt to fw800 adapter from apple, then also use that with fw800 drive if needed on the 2nd thunderbolt port. This will free my fw800 on the imac for the canon zr850 to ship the video to the TV for color correction. I guess in my mind, it should work because now the fw800 on the imac and any fw800 drive connected to the lacie adapter, are on a different bus. Hopefully my mind is thinking in the right direction, and not just boggled from all the info research I've been doing for my most inexpensive option now, but still give me functionality for my external drives and expansion.