Time Machine: Lion vs. Lion Server... Lion Server breaks existing function?

Hello, I hope someone can point me in the right direction,

I recently upgraded (clean install) all of my machines to Lion. I decided to "start over" with a new time machine setup where each computer would have its own partition on the external drive. I hooked this drive up to a mac mini I had and connected all the other machines to it via the LAN and everything went well for a few days... until I tried to be clever. I decided to try Lion Server on the mini. After I added Server (which just seems to be a bunch of admin utils) and rebooted, my time machine setup stopped working. I am now getting the dreaded "the network backup disk does not support the required AFP features" (specifically TM Lock Stealing). From the client log:

8/7/11 9:31:28.531 PM com.apple.backupd: Starting standard backup

8/7/11 9:31:28.548 PM com.apple.backupd: Network destination already mounted at: /Volumes/Yggdrasil TM

8/7/11 9:31:43.988 PM com.apple.backupd: Destination /Volumes/Yggdrasil TM does not support TM Lock Stealing

8/7/11 9:31:54.000 PM com.apple.backupd: Backup failed with error: 45

Also, that volume doesn't appear anymore in the "Select Disk" dialog of the client. The volume does appear in sharing and I can copy files to/from it via Finder on the client.

Now, I went in to Lion Server and enabled "Time Machine" and set the "backup destination" to the same volume. That works fine. I can select that location and backups from my client go with no problem. That makes me think this is an arcane configuration issue... how can I get Tiger Server (or maybe it's on the client end) to recognize that the exact same disk/partition, just a different Folder is ok to save TIme Machine backups?

In other words... One share: "Yggdrasil TM" is at the root of a partition, which used to work for Time Machine in Lion prior to Server. Another share, "Backups" is inside "Yggdrasil TM" (/Volumes/Yggdrasil TM/Shared Items/Backups on the mini server). Any ideas?

I did notice that /Volumes/Yggdrasil TM/Shared Items/Backups has a .com.apple.timemachine.supported file in it, but it still didn't work after I "sudo cp -p" that file into where my older sparsebundle was.

I even went so far as to double check permissions and ACLs for both directories as being the same:

$ ls -ldae /Volumes/Yggdrasil\ TM/ /Volumes/Yggdrasil\ TM/Shared\ Items/Backups/

drwxrwxrwx+ 10 root staff 408 Aug 8 00:37 /Volumes/Yggdrasil TM/

0: group:com.apple.access_backup allow list,add_file,search,add_subdirectory,delete_child

1: user:_spotlight allow list,search,file_inherit,directory_inherit,only_inherit

drwxrwxrwx+ 5 root staff 170 Aug 8 00:32 /Volumes/Yggdrasil TM/Shared Items/Backups/

0: group:com.apple.access_backup allow list,add_file,search,add_subdirectory,delete_child

1: user:_spotlight inherited allow list,search,file_inherit,directory_inherit

I also played around with the /usr/sbin/sharing command, but that doesn't seem to have any real settings to do with this.

I guess I'm stumped, any suggestions before I restore the mini from time machine and give up Lion Server as a lost cause?

Thanks