Transmission library is getting much attention from principal developer recently. There are big changes. And some bugs can be introduced with such changes. I follow this changes with my daemon, but I do not study all the changes.
See http://transmission.m0k.org/cgi-bin/trac.cgi/timeline

I think that this "Unable to open ..." problems started with Merge io branch into trunk . So package before r1356 should not have this problem.

How to downgrade package? Go to http://ipkg.nslu2-linux.org/feeds/op.../cross/stable/ and select package and then with mouse right click select "Copy link location". Open telnet in your router in tmp directory and then paste this after wget. For example:
Code:
wget http://ipkg.nslu2-linux.org/feeds/optware/oleg/cross/stable/transmission_0.6+r1320-1_mipsel.ipk
Then just issue
Code:
ipkg install -force-downgrade transmission_0.6+r1320-1_mipsel.ipk
Anyway, I have upgraded to r1214 in http://trac.nslu2-linux.org/optware/changeset/5249 and It looks like it works. But did not done much testing. Just following the logs for errors.