I over looked on thing that has partially solved my problem. When starting Final Cut you can select a scratch disk location on the preset window before Final Cut really opens. I have overlooked this is the past because I am used to controlling the scratch disk from with in the program. Final Cut is supposed to set the scratch disk to the local users documents by default, however it looks as though it is going to a folder called students. The path of this folder is not listed (I assume it is some sort of network user folder). If I change the location of the local documents folder at this time before Final Cut is fully launched, the error is avoided, and the preference file is written correctly.
I feel kinda stupid for going through all that trouble when the solution was very simple. It still does not explain why Final Cut is setting the scratch disk to the students folder. This is not a local folder. My students that are using Final Cut for the first time or switching to a new computer will need to be reminded to change the scratch disk or the preference file will need to be deleted. It would be nice if the scratch disk would set locally like it should.
Where is this student folder? No drives are mounted, and no folders can be found locally by this name. Is it some sort of mobile home folder? I have chosen to force a local home folder for all network users so this is strange. I will investigate the UID. I noticed I can remap the UID in the Directory Utility. Could this be a solutio?