I received the following canned response from iTunes support
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Fortunately, you should be able to resolve this by following the instructions in the "Remove the SC Info folder" section of this article:
http://support.apple.com/kb/TS1389
After removing the SC Info folder, please authorize your computer to play the items you have purchased from the iTunes Store. If you have multiple iTunes Store accounts authorized on your computer, you will need to authorize them again to play any purchases made with those accounts.
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The response was of little value. I deleted the SC Info folder and I was able to playback the movies while iTunes was open but the next time I booted up iTunes, the problem was back.
So essentially deleting the SC info folder was like re-installing iTunes but did not fix the problem.
In looking at the files in the SC info folder, the weird thing is they still have the same date stamp and filesize.
Clearly the problem lay in the two files in the SC info folder.