I had this problem, and the easiest solution was to give a try to banshee.... after disappointing performance issues and crashes, I decided to look back at this problem.
I found that is possible to set the path of lyrics through dconf-editor. Just download it from repositories and search for rhythmbox/plugins. After setting the path to the directory where I keep lyrics, rhythmbox started to display lyrics, surpringsinly some new songs were shown as well, so it seems to be working directrly from the internet again.
There is a possible workaround.
I had this problem, and the easiest solution was to give a try to banshee.... after disappointing performance issues and crashes, I decided to look back at this problem.
I found that is possible to set the path of lyrics through dconf-editor. Just download it from repositories and search for rhythmbox/plugins. After setting the path to the directory where I keep lyrics, rhythmbox started to display lyrics, surpringsinly some new songs were shown as well, so it seems to be working directrly from the internet again.