That article doesn’t apply in this case as I can’t see any errors on the server.

Couple of hints: its quite likely that there is a proxy or some software that’s intercepting the requests and not returning a valid response.

Or, I have seen in some cases where users' local checked out copy (called the working directories) were somehow corrupt.

You could try renaming the folder without using a subversion client to something else and doing an update in the parent folder:

$ cd /path/to/bad/parent/directory
$ mv badfolder badfolder.temp
$ svn up .

that should attempt re-download a new version of badfolder and then you’ll have to merge it by hand. Do remember to delete T@badfolder.temp@ once you’re done.