Is the drive that has your /plexmediaserver/Library/ folder on it capable of executing programs from it?
Look in /etc/fstab. If that drive has noexec set, delete that entry and reboot. Make a backup copy of the file first.
Version 0.9.17.x and up will not transcode if that folder is on a drive with noxec set.
If you can not play media directly and it has to be transcoded it will not work if that folder is on a drive with noexec set.