I was having this issue, and hoped that the latest firmware release would resolve it, but it didn’t. i have a My Book Live Duo, firmware level 02.32.08-067, and am trying to connect with my iPad (3), which also has the most up to date WD Photo app. I read an earlier post and decided to wait after the upgrade to see if it re-indexed correctly, but it has now been several weeks and I’m getting the same error.
You should take a look at this: http://community.wdc.com/t5/WD-Photos/file-not-found-404-17-26-WDphotos-app-looking-for-deleted-files/m-p/320711#M643