If you connect with SFTP in WinSCP, what does your problem have to do with WebDAV? You cannot connect to WebDAV server using SFTP. Though your "file server" might support both WebDAV and SFTP. Maybe the SFTP API is broken. Why do you connect using SFTP, when WinSCP supports WebDAV and WebDAV seems to work correctly?
If you connect using any other client the same way as with WinSCP (i.e. using SFTP???), what times does it display? Please attach a full session log file showing the problem (using the latest version of WinSCP).
To generate the session log file, enable logging
, log in to your server and do the operation and only the operation that causes the error. Submit the log with your post as an attachment. Note that passwords and passphrases not stored in the log. You may want to remove other data you consider sensitive though, such as host names, IP addresses, account names or file names (unless they are relevant to the problem). If you do not want to post the log publicly, you can mark the attachment as private.