You get this message when WinSCP is waiting for response from the server for more than configured time. Note that this is not an error message, WinSCP still keeps waiting. If the server responds finally, the message goes away automatically. The message box is shown only to give you a chance to break the connection and reconnect, if you do not want to wait anymore.
If the server never replies, it may be because of some fatal error on the server side. Also something may be interfering with the connection, preventing the server response from arriving or possibly even the original request to arrive at the server.
If the problem repeats, try turning off Optimize connection buffer size.
Some users also experience this message, when they run out of disk space/quota on the server.
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