Thanks for confirming that you saw this too colinjones.
alx9r - I have seen this issue with exactly that "corruption" in the file....
I saw another thread where you mentioned this -- but not until I diagnosed the problem myself.
FYI - for some strange reason, this is the way that LinuxMCE implements the Boot from HDD option when rebooting an MD. If for some reason you chose in the web admin or the UI, either deliberately or accidentally (easy to do) to boot from HDD, it writes that # character in there that causes the PXE boot to fail and thus drop through to HDD boot... if you have a bootable HDD and it is still in the BIOS boot sequence.
I don't see quite the same thing:
* In webadmin, "Diskless Boot" remains checked for that media director.
* Once the LOCALBOOT line is fixed, pxeboot works for multiple reboots.