Have you placed NO_SMS_ON_DRIVE.SMS file on the same partition on which the Content Library is located? If so, you may also face the same problem described in the KB article 2794136. This behavior is expected if a NO_SMS_ON_DRIVE.SMS file is placed on the drive after using it to host the Content Library. To resolve the issue, remove the NO_SMS_ON_DRIVE.SMS file from the partition used to host the Content Library.
Distmgr.log
ExpandPXEImage: CAS0000F, 16778240 SMS_DISTRIBUTION_MANAGER 07.08.2012 00:12:55 3472 (0x0D90)
