has your webserver the crossdomain.xml installed at localhost?
I’m not sure localhost works at all on webplayers, as they never have a reason to access localhosts actually. don’t forget they run on the end user machine, not the server and localhost in this case would be the end user machine too where your service isn’t running for near granted.
The crossdomain.xml is there (localhost) the problem remains …
I also tried instead of localhost to put the local IP http://192.168.103.3/… but nothing change.
Finally I am not sure about your latest statement: