Locomotion System Error When No Shadows "Line-sphere intersection failed"

Basically the "Line-sphere intersection failed..." error of the Locomotion System occurs when the camera can't see the 3d model that makes use of the locomotion system (first person view), and if there are no real-time shadows in the scene. The game is a first/third person shooter.

It only happens in first person view when there are no shadows. If there are shadows, the error does not happen. It does not happen in third person view regardless if there are shadows or not.

Any help is appreciated!

http://www.youtube.com/watch?v=sCIZjmCjsYs

UPDATE: Its not only shadows that fix the problem. If I set the first person camera in such a way that the character model can be seen on the screen no matter how tiny the portion, the bug doesn't happen. Of course it doesn't make sense to do this since its supposed to be a first person camera.

Unfortunately, if I switch to the scene view and look at the character model, the bug doesn't happen. If I have a scene view open together with my game view, and the character is seen on the scene view, the bug doesn't happen. In short, if the character 3d model is visible anywhere, the bug doesn't happen.