As with all of these Avid errors, just skip ahead to other less-technical blog content. I post these when I want solutions to turn up better in searches for other Avid users (and myself).
This ‘no directory specified’ error is actually pretty well documented and it gives the helpful hint that it involves an MSM file in a directory. The first thing I tried was deleting the MSM files — as probably every Avid user with any experience has tried many times. The MSM files are the database that points Avid to all the media in the OMF and MXF MediaFiles directories — there should be two files in each of those folders that start with the letters ‘msm’.*
Unfortunately, I only deleted the MSMs where I had been saving media files — on networked fiber drives. The culprit MSM was actually local, in a path I found thanks to a posting by ‘jaaed’ on this Avid Community forum thread: Macintosh HD/Applications/Avid Media Composer/Supporting Files/Avid_MediaFiles
For Windows users, that path should be C:\Documents and Settings\All Users\Documents\Avid Media Composer\Avid_MediaFiles — according to the thread. UPDATE: A commenter below says the path is different in Windows 7.
* NB: When deleted, the MSM database files rebuild automatically when you click go back into Avid. The rebuilding can take some time, depending on the number of media files that are on that drive.