server unexpectedly closed network connection

I have just installed winscp the latest version 4.2.9 and did not have any previous version before this. I tried to connnect my iPhone 3GS but i keep on getting this message:
"server unexpectedly closed network connection"

I have already change the password using terminal but I cannot connect. I do have two routers on my network (the second one is being used as an access point) and my iphone is always connected to the second one as the signal from the first router does not reach where my computer is and my computer is also connected to the second one via ethernet. both routers are connected to each other via ethernet cable.

Any help would be much appreciated
Thank You.