Another thing you may want to look at is the local info for your site. If you are testing locally and have local files specified in the testing server portion then you should have this same information specified in the local settings. This way DW will not need to sync to the testing server since it is the same location as your local files.
Eric - I get this with any folder. I reset my site cache but still the same. I checked the setting on testing server and same result. I am at a loss I think I must be missing some file in the download.