Well, it's working now. I'm not sure which of the following solved the problem, but here is what I did:
1. Updated Java to 7 Update 21
2. Installed PMS as a Windows Service
3. After being unable to connect to PMS from the PS3 while running only as a Windows Service, I manually stopped the service and resumed GUI version
After restarting the GUI version of PMS, the subtitles are now showing in the transcode folder. Problem solved!