Ok, got it working...sorta. I could get it to run if I set
I then changed the
$RecurseLevel = 0
and then did this:
$CheckFolder = array(DIR_FS_CATALOG . 'includes/', DIR_FS_ADMIN);
and increased the $RecurseLevel and it worked.
$fw->excludeFiles( array('./images/', './bmz_cache/') );
You were right, on the permissions for the snapshot_filewatch.txt file being world writable. Directories in my case are 755... (I might re-test this as I never modified the script to enforce 755 instead of 777...)
I think having about 100,000 images chokes the script/server....