Hi Ty,
Are you working with modules ?
The ApplicationDomain should actually create two instances of ApplicationFacade for each swf you're loading. Did you try compiling the swf that you're loading, excluding the common classes ?
If you're interested to find more information about how flash player manages individual swfs you can review this link:
http://www.adobe.com/livedocs/flash/9.0/main/wwhelp/wwhimpl/common/html/wwhelp.htm?context=LiveDocs_Parts&file=00000327.htmlDragos