After a lot of research, this is actaully a server configuration issue.

The following bug reports for PHP have caused a change in php behaviour recently:

http://bugs.php.net/bug.php?id=41561
http://bugs.php.net/bug.php?id=43677
Someone else experiencing the same thing
http://roundcubeforum.net/release-candidate-2/2458-problem-php-5-2-5-ini_set-change-include_path-vital-function.html

The problem is, if your webhost enters a non standard directive in the apache configuration file, like this:

php_admin_value include_path "/some/other/path"

Then PHP scripts are then unable to set/unset the include_path from within PHP (This is a VERY common technique for PHP Developers)

This is why you get the message you get below.  Because we are unable to append the include_path with the correct path to the Zend files.

I have managed to replicate this locally - but I have been unable to overcome it and therefore our applications will not work if a system admin has defined the include_path in the apache configuration.

Please forward this information to your webhost and ask them either to

1) remove the custom php_admin_value include_path in the apache configuration

or

2) Add the absolute path to the Zend folder which is "/something/to/your/public_html/plugins/system/blueflame/libs/Zend" to the include path they specify