...does sound concerning, it certainly sounds to me to be their end in part, missing pdf on output is not one I have come across before...
...if sending them a 1.4 pdf that contains transparency then when they come to print from indesign to postscript they will need to flatten the transparency, if they export to 1.4 or higher then the rip they use will need to support flattening...
...i suspect they flatten when printing from indesign, so your best bet is to send them a pre-flattened 1.3 pdf as you have done this time around, see if this helps the problems you are experiencing...
...the best you can do is ensure that you embed all fonts, have the transparency blend space in CS2 as CMYK not RGB, export to 1.3 pdf, choose high flattening settings...
...if i ever get troublesome pdf files i have often resorted to exporting to eps from acrobat, using pitstop to convert all text to outlines and then place this in my required document. This is of course only if i have trouble contacting the client and whether i have the time to trouble shoot...
...if they are not aware, there are updates to indesign 2 which, if not already done so, be worth investigating here:
Andrew