Recently we came across the above problem. After digging in for about 1 day we found one solution which I will like to share.
This error comes when you are using rails with flex and svn as repository. in this case try to recreate html-template thru flex or delete html-template from your machine and copy this from some other machine(where the application is working) and then try to recreate this folder.
we solved it thru this only.
We are looking for any other workaround of this . if anybody knows please let me know.
