Well, then we can call it a permissions issue from the WinSCP error. (really good bit of software that)
I don't know enough about your network, so I am going to take a guess here. Are you using NFS at all? If so, the following may apply:
Unable to Create Virtual Machines on NFS Volumes Configured as NAS Datastores
Description: The NFS volume was published with restrictions on root access (root squash enabled). In order to be fully functional as a NAS datastore, VMware system software, such as VirtualCenter, esx, and the connection agent running on the esx, must be able to manipulate the file system to create directories and set permissions. Many NFS servers do not allow full root privileges to remote users. As a result, when a remote user like VirtualCenter or an ESX Server host tries to create virtual machines on an NFS datastore, the attempt fails with a version of the following message:
vmodl.fault.InternalError -- An internal error occurred on the server
You may have restrictions on root access, and you mentioned that you are trying to access the file system as root. This would result in the kind of error you are seeing from WinSCP. Again, I may be totally off base as I don't know your setup, but this is the first thing that comes to mind. (The above quote deals with the error through the VMware interface, not through WinSCP, but the same principle applies.)
