I published 8 versions of a SketchFlow prototype to SharePoint but then on the 9th time, it started prompting me for credentials. I type my credentials and it gets to the "Creating project folders" message before it fails with a 401 error.
Fiddler also shows me a bunch of HTTP 401 error messages.
Sounds like your sharepoint server has decided you are not authorized?
Are you using a sharepoint server or sharepoint online? Are you using the login client (if you are using sharepoint online)?
What version of Blend are you using? V4 RTM or V4 SP1? There were some fixes with sharepoint interop in the SP1 release.