[Action Script] UrlLoader throwing security sandbox exception in Firefox June,2012

Our app used to work fine on all browsers (IE, chrome, firefox is what we deliver it into) but for more than a month now it has stopped working on firefox selectively. By selectively I mean that it works on firefox on some machines like - if a user accesses it from home network it works fine, and for some users it works on office networks as well so we cant really generalize. I debugged the code within office network and these are the first 3 lines of trace that I get on console.

[SWF] C:\VMC_Development_Release\New_UI\bin-debug\xyz.swf - 4,166,632 bytes after decompression
*** Security Sandbox Violation ***
SecurityDomain 'null' tried to access incompatible context 'file:///C:/VMC_Development_Release/New_UI/bin-debug/xyz.swf'

Above error comes when first xml is loaded by the app. The error is thrown on the line in bold.

public function loadAppXml():void
{
var urlLoad:URLLoader=new URLLoader();
urlLoad.load(new URLRequest("xmls/emailName.xml"));
urlLoad.addEventListener(Event.COMPLETE, onXmlLoaded);
}

public function onXmlLoaded(e:Event):void
{
var xm:XML=XML(e.currentTarget.data);
}

We have not been using crossdomain.xml at all. and i dont think that is the cause of the problem as our app works on mozilla on many machines anyways.

Can anybody suggest a solution?
Any help is highly appreciated.
UrlLoader throwing security sandbox exception in Firefox

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