You’ll have to edit the /opt/init.d/S60mt-daapd and add the -d9 to the line that runs mt-daapd.
The -d9 option that you are passing to S60mt-daapd doesn’t get handed off to mt-daapd, so it gets ignored. With latest nightlies, though, you can add the “debuglevel” parameter to the config file, if that helps.
— Ron