I'm having an issue with using the private filesystem and transcoding video with the latest beta release of the module.
Any video I attach to a node is being transcoded correctly to the private filesystem (private://videos/converted/NID/FILENAME).
When I try to access the converted file I get 'access denied'... even on the top uber admin account. I can access the original video file under private://videos/original/FILENAME
I noticed that the converted files didn't have an entry in the file_usage table which I thought might cause the issue so I added entries for the files but it didn't help.