Can I ask a dumb question? Why are you delivering this video from a secure server? HTTPS is notoriously slow and encrypted for secure credit card transactions and collecting private information. I could be missing something obvious here (I often do). But offhand, I just can't see why you would ever need or want to deliver Flash video from an HTTPS server.
The site was existing. Until I got into this issue I did not realize the problems with mixed media. I am also addressing this issue with Microsoft. The overhead on small sites is limited depending on your bandwith and how large the file is, the beauty of progressive downloading is that the video stream usually exceeds the player rate depending on the framerate the video is compiled in and occurs in the background. As you probably know the initial cacheing of the video does take a performance hit under https delivery however if the page is small and you are delivering limited videos on the page it makes better sense than investing thousands of dollars for a media server and the hardware to support it. The other most obvious benefit is that unless you hijack the https request via proxy or you capture the cache stack for the video the stream is encoded. It is just a cheaper alternative to web streaming which has its own problems (much the same as progressive except for the swf packet).
To make a long story short I didn't know much in the beginning and have spent 800 bucks and alot of time to rectify what should not be an issue as long as all of the resources are under the ssl umbrella. Which was one of the reasons that https was developed under the ssl handshake in that secure transmittion of data could occure over the web protocols. Back when an ssl certifcate cost a bunch it was used primarily for secure shopping cart transactions and non encrypted data capture technology was not everywhere. I digress... it has been a long day and I appreciate your post.