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Not extensively tested yet, but so far it all looks to work normally.
Looks like my issue was nested folders. FM8 (And I suspect 7) is looking for the root MapArt folder then a symbol set folder that contains one or more category folders. Some of my PNG folders that I've collected have had a third, fourth or fifth layer of organization like Sci-Fi/Streets/floors/interior etc.... I'll go through and fix the hierarchy and things will be fine!