you might want to post this in the API forum.
Taking a step back and looking at your general situation, however, you might look into adding folders to your file search paths in Tools>Options: System Options: File Locations under Referenced Documents. Doing this and enabling "Search file locations for external references" on the External References panel will force SolidWorks to search the folders you've specified for each reference loaded in an assembly or drawing.
If you open files over a network, this is usually a neccesary step, although it does slow down file opening times if there are many folders in the search path.
I will respost in the api section. Didn't really think about that. As for the advice, unfortunately the files are stored in a file share system that requires an addin in to be created to search through it for the missing files. i can create a menu based search for searching through the file system manually, but ideally it would be done automatically when solidworks fails to find it locally. That's why i was wondering if there is a way to capture the file found error and deal with it my own way.