Ya. SSI shouldn't be able to access the absolute path because then you could have a malicious person request a printout of your .htaccess or username.pass or somethign great like that.
I had that problem when I first moved to lunarpages, and i finally figured out that it was just the wrong path name.
When the SSI is workign correctly and the script is not, you will get whatever the output was, and in this case it would be a 500 error. The "Error processing directive" is a failure in the SSI to execute the command.
Its kinda annoyying cause sometiems you need to nest ../ to go back a directory or two at times.