Custom validation is not being called on production server but works on localhost

[eluser]vanquish[/eluser]
Aha, much closer now! I found the core root of the problem. The issue lies in lines #754-757 of Loader.php, found in system/libraries/

The main problem is the file_exists on line 757 returns FALSE on the remote host and TRUE on my local host. So this PHP function is causing all the trouble! Is there any way to find out WHY it is not working remotely? My entire CodeIgniter setup is identical on both hosts, and I am working on the latest version of CodeIgniter.

Code:

$subclass = APPPATH.'libraries/'.$subdir.config_item('subclass_prefix').$class.EXT;

// Is this a class extension request?            
if (file_exists($subclass)) {
    $baseclass = BASEPATH.'libraries/'.ucfirst($class).EXT;

$subclass holds the following path for my custom form validation:
application/libraries/MY_Form_validation.php


Also, I should note that realpath($subclass) returns the full path locally, but just an empty value on the remote server.