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I actually have the same thing happen sometimes (blank page), but it does not affect the download actually getting submitted. The fact that your error is returning a local path is a bit odd....did you open the file in an editor and then it messed up all the paths?
you may want to try uninstalling the module by deactivating it, then uninstalling it, then deleting it off your server, then verifying the tables are no longer in your database (if there was info you wanted to keep, you will want to export the tables first to a text file so you can readd them later) and then download a fresh copy of the module, make any config changes carefully in a text editor like ultraedit, not an html editor, and then upload it, chmod it where it needs it, and then install it again. Make sure if you are using the default mydownloads that you use the same version as your core.
I'm not a super expert by any means but this is usually the strange logic I use to fix problems with my site and it works. There should not be a local path in that error message unless you are trying to test XOOPS on a local workstation in which case...well...anything odd can happen there... you could also try the group access controlled download module which you can find in this thread:
https://xoops.org/modules/newbb/viewtopic.php?topic_id=16805&forum=4&start=80