That could have been the problem, but in this case (which is more common) the Library alias was directed to the wrong path. (This happened on several of our servers when we upgraded and changed the root directory of WeBWorK. Courses that were archived, stored and then unarchived will have these problems.) The libraryBrowser won't override an existing link and issues the message above.
You are correct that this has to be fixed from the command line. Using unix commands you can correct the paths the link points to or if you delete the link entirely then the libraryBrowser will create a new one.