local directory not found...
I believe that the problem was introduced in the latest release. Please try to download WinSCP 3.7 beta. It may work for you.
Also I would appreciate if you send me a contact to you, so I can investigate and possibly solve the problem.
I currently have 3.7.1 Build 257 installed - I'll let you know once I've been able to test the beta - could take some time.
You can read me at my gmail account which is r4v3nn at gmail dot com.