After upgrading to firmware ver 1.06, did you perform a "Reset to Defaults" on the DNS-323? If not, I would suggest doing that now, then starting over with the UPnP server setup. With SOHO/home-grade networking devices, it's best to do an NVRAM reset both before AND after upgrading to a new firmware.
Secondly, if it worked with 5 files, then stopped working after adding in the in ~500GB of files, then chances are you have some files somewhere in that 500GB that're the cause of the problem. I would suggest adding a little at a time (e.g. add in the T.V. shows, test, add in movies, test, add in music, test, etc.).