Access both network and local files, no cfg file

Is it possible to access both network and local files, flash player 9/10?

Here is the situation:
I have an SWF which runs locally on the client’s machine.
It communicates, via XML socket, to a C++ server.
It also needs to read some configuration files from the local file system…

c:\config.xml [COLOR=“Red”]<—>[/COLOR] test.swf [COLOR=“red”]<—>[/COLOR] C++ server

So I need the SWF to be fully trusted, as if it was ran from the Flash IDE…
But I can’t tell my clients to set it to be fully trusted using Adobe’s Global Security Settings Panel

What I can do is alter my C++ server code, somehow granting permissions to the SWF…

Is it possible?
I’ve read a lot about the policy file and thought that the server can send a policy file XML to the client SWF and allow it to both access local files and connect via XML socket but I cant make it to work…

Appreciate any help on this matter,
EZ