This is how I have resolved my issue with MBLD and my iPhoto Library:
After all the time and energy into the matter, I now have an 500 GB external WD Passport Elite HDD where I put both my 272 GB iPhoto Library and 190 GB iTunes Library on (connection via USB2). I then use my MBLD as strictly a backup drive (connection via local area network - CAT6). It is a very expensive 6TB backup system that I have setup as RAID 1 (therefore only 3 TB), but it functions well.
Time Machine will keep on making backups of the changes and eventually running my space down on the MBLD, but I am at ease with having a backup of my libraries. In that sense, it was worth the trouble, time, and energy to finally set it up this way.
Perhaps the only other thing I would change would be to get a “faster” external HDD. The connection via USB works fine. Sometimes iPhoto works sluggish on some big edits of photos and scrolling the 400 + events, but it works. You also have to take into consideration that I have an older iMac (OSX 10.6.8 - 2 GHz Intel Core Duo with 2 GB 667 MHz DDR2 SDRAM).
But I am happy to report that I have space now on my local HDD and that was my initial problem. I am sorry to hear about the problems others have and I do understand the frustation, time, and over-all energy into solving or attempting to solve issues can be. Thanks Tony for the heads up on iPhoto. Would have loved to have known that before but trial and error and live and learn.