Hmmm hard to guess what's going wrong here. I'm not sure whether 1.0 looks for the FLX files in the data directory by default, you may need to explicitly specify the path to the files in your exult.cfg file.
I keep the FLX files in f:\data\jmsfx.flx and f:\data\jmsisfx.flx so the relevant section of my exult.cfg file looks like this:
I had a similar problem (with audio options not recognized properly) and found out the program had appended a second configuration block at the end of the regulat config file. Happened with the 1.1.x branch....
No, I'm afraid I deleted the double part of the file. It might have been a typo, but then again, I only kept the first block, and it worked.
This happend while exult was crashing, so perhaps this happened during a crash (though I can't imagine how... ).