I am having this issue also...for the 2nd time I have everything set up properly and it will be working fine, then all of a sudden one day when trying to "update" I get this window that says
"Synchronization Error - Server failed to respond to connection attempt.
This will only happen sometimes for the first couple days, then it is every time and will not update/sync. The 1st time this happened it was suggested to me to run a drive cleaner program, which I did and (although it corrupted my audio files) it did seem to fix the sync problem; for about 4 weeks, then it started again and here I am unable to function properly.
I am running on windows 7, if that makes a difference.