Phil,
Facebook can be very picky about the Privacy policy. Not only does it check that the page is available, it checks for a few other things:
* Is the page available to be loaded?
* Does the page redirect at all? The URL you specify should be the direct link to the page.
* They seem to actually be don't some 'checks' on the page itself to make sure it really is a Privacy policy and not just any random page from your site. This is the hardest thing to understand because we don't know what they're checking for. If you have a Privacy page though, please make sure there is a "Privacy Policy" title (or something similar) and some actual stipulations. Not just an empty page.
If none of that works, please:
* Let us know where your Privacy Policy is. We can test with an app.
* Try to access the
Facebook Developers Area
and set your Privacy Policy URL there to see if it changes the behavior when you save.
I hope that helps,
Alex