Try disabling ZLIB compression as described in the SFTP tutorial (no need to specify any of the other parameters) and give it a try. This is a new feature in build 3588 and it looks like it is not working as expected with one of your SFTP servers. Several other users also reported problems with this feature and it will be turned off by default in the next release.
If this doesn't help, please send us the communication log created using the Sftp object's LogWriter property (as described here)
Update: Build 3723 has ZLIB compression disabled by default. Since build 3793, ZLIB compression works fine with GlobalScape.