This is in Adobe's Flash bugbase.
Please go there and vote for it to be fixed.
Live H264 with bufferTime=0 works on Flash Player 10.x, but fails when Player is upgraded to 11.0 or 11.1.
Flash Player Beta 11.2 (incubator build) fixes problem, but 11.2 isn't scheduled for release until first half 2012, which could be as late as June.
Problem is visible using examples/LiveVideoStreaming/clientOSMF.
Problem is visible using examples/LiveVideoStreaming/clientFlex if you add the line:
nsPlay.bufferTime = 0;before the line