This isn't a Flex-specific issue. It sounds like you clicked "block
unsafe content." IE asks if you want to do this when you load Flash (or
many other things) from a url on your local filesystem.
(C:\...whatever), and then I guess it remembers that preference.

 

I don't know exactly where to turn that off, but googling "block unsafe
content" and your version of IE should find the answer.

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