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Description of problem:
If a daemon using FANOTIFY needs to open a file on a watched filesystem and
its wanting OPEN_PERM events, we get deadlock. (This could happen because
of a library the daemon is using suddenly decides it needs to look in a new
file.) 

Additional info:
Patch allowing this is posted upstream:
http://lkml.iu.edu/hypermail/linux/kernel/1510.1/03342.html

I sent a patch based on sgrubb's, moving "policy" to userspace at open time to fsdevel, and Jan Kara dumped cold water on that too.  As I am really not an expert in the subsystem or the usecase here, it'd be great to have sgrubb et al chime in with ideas and opinions on fsdevel...

This has never been agreed to or merged upstream, moving to 7.4 for now.

This can actually be closed. I am making different plans to solve the problem. I do appreciate all the help on it.