I've scoured the archives, I've scoured the Yahoo/jb3 forum, no luck. Reading from Notmad's revision history, it makes it sound like it's possible to play flac's from the jb3. But how!?
Here's some snippets from Notmad's revision history page:
AudioMorph "2"
We have completely overhauled the AudioMorph framework for transcoding files on-the-fly. The new AudioMorph features a brand-new intuitive user interface for specifying how you want each audio file format to be handled. AudioMorph also now supports more external plugin encoders and we've also added support for the popular FLAC format. This means that with the appropriate plugins, you can now enjoy your Ogg Vorbis and FLAC files on your Nomad in addition to MP3, WMA, and WAV files. As before, you can also reduce the bitrate of your existing files. There is also a new option for quickly switching AudioMorph on and off for all formats at once.