Does your NAS use any form of RAID?
There are a lot of threads on the Squeezebox forums about raid causing things to be horribly slow and often timeout.

Actually, the general consensus there seems to be that using a NAS with a server on another PC is extremely quirky and difficult to get right even when it is the sole folder location. Seems most people just give up and revert back to local storage.

I myself, have never tried it.

With great power comes Awesome irresponsibility.