OK I finally figured it out by reading this thread:
http://www.eqemulator.org/forums/sho...ariables+table
He talks about the same error, and how it wouldn't work because he forgot a \ in the path name in the db.ini and when he fixed that, it worked.
I am on my developer machine remoting into the server, so I didn't have EQ installed on the machine. I installed EQ SoD and now the item editor works fine.