Okay, I am going to give you an overly complicated answer to a relatively simple fix (or at least what appears to be), but I don't like getting answers that I don't understand.
Slimserver, by default, runs under the user name "slimserver". That user name doesn't exist on your system. That is what the "5010" is in first column of the process listing. Since you system doesn't know who slimserver is, it uses a number to keep track.
Your permissions are set to allow creator and groups to have full access to your directory (your permission string "drwxrws---"). The last three permissions indicate that if you aren't the creator or in the group, you can't do anything. That is the problem slimserver is having.
So unfortunately, I think the best solution is the one I haven't tried. You need to get slimserver to run as a user on the system. That can be accomplished one of two ways, 1) add the user "slimserver" to your system or 2) make slimserver run as a user on the system. 1) can be done through the web interface. If you add slimserver, you should just have to restart slimserver to get it to work. 2) will need to be done by editing the /etc/sysconfig/slimserver file, which has a variable in it called SLIMSERVER_USER. You would just need to change that to a user on the system that can read the files (like www). These are the more elegant solutions, but I haven't tested either. If your problem is as described, that should solve it. You will know you have done it right if after restarting slimserver you have a name in the "ps -ef | grep slimserver" listing and not a number.
The second option would be the brute force one. You could add the read permission to the directory and the files in that ibay. This could be done with the following:
find /home/e-smith/files/ibays/music/files -type d -exec chmod o+rx "{}" \;
find /home/e-smith/files/ibays/music/files -type f -exec chmod o+r "{}" \;
This gives read and execute permissions to all the directories it finds under the ibay (1) and read permission to all the files under the ibay (2). The one problem you will have with this set up is that all new files added to the directory will likely not be readable without changing the permissions again.
So try the first option and let me know how it goes.