I solved the problem by upgrading the way files are uploaded and displayed to the new WordPress 3.5 method.
A more detailed tutorial can be found at http://halfelf.org/2012/dumping-ms-files/ but the basic steps are as follows:
- Move images from
blogs.dir/#/files/
to/uploads/sites/#/
- Change WordPress settings so it doesn’t look in
/files/
but in/uploads/sites/#/
- In .htaccess or your nginx config file remove ms-files.php line/section
- Search/replace the posts table for each site, changing
/files/
to/uploads/sites/#/
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