When trying to over write a file, using the scp protocol, that you are not the owner of the copy dies with "Operation Not Permitted" when it tries to set the mode. Once this error occures it begins giving errors about reading the directory.
The user has permissions to the file. The work around is to first delete the file and then upload it again. Which is annoying.
Normal scp from a unix commandline overwrites the file as expected for that user.
Changing the ownership of the file to that user before uploading also fixes that problem.
To fix the directory errors, the user has to reconnect tot he server.