FreeNAS nightly builds have just added support for Lion Time Machine. This had previously been an issue for Lion users due to a break down in Netatalk source releases.
This is sad news, an open source project stops releasing source when they feel like they should be paid for their code. Thankfully, Data Robotics, Western Digital Corporation and QNAP all chipped in and got them (presumably) a big wad of cash, and the netatalk 2.2 source has been pushed to Sourceforge.
So what does this all mean? It means I get to do Time Machine to my home built NAS again.
So Here’s the Fix:
Go grab a current nightly from the FreeNAS Nightly builds - http://sourceforge.net/projects/freenas/files/FreeNAS-8-nightly/ and re-image your FreeNAS box using FreeNAS-8r7165 or higher. Make a backup of your configuration first, and remember, this is a nightly build. That means that it has had little to no testing at all. I’m sure there will be a tested version posted soon enough, but I am having no issues right now.