I am using ...Sftp.dll and ...Ssh.dll v2.0.3854.0 and have the Compression parameter in the Connect call set to True.
This might be a known bug which was fixed in the version 2.0.4060.0. Please try to use the latest version. If the problem remains, please send us the communication log (as described at rebex.net/kb/logging.aspx)
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