Cannot upload to root images directory in Assets, subdirectories OK

I'm having trouble uploading images using Assets.

Assets: v2.1.4
EE: v2.6.1 - Build Date: 20130506

They are uploading. If I refresh the Assets screen, I see them. But when I upload them, I receive this error:

http://circa1977.net/snap/assets-uploading-trouble.png

Note that's only the case for the Image Uploads level directory. If I select Team on the left, and upload, I have no trouble.

Here's the AJAX response:

<div style="border:1px solid #990000;padding-left:20px;margin:0 0 10px 0;">

<h4>A PHP Error was encountered</h4>

<p>Severity: Warning</p>
<p>Message:  mkdir(): No such file or directory</p>
<p>Filename: libraries/Filemanager.php</p>
<p>Line Number: 1311</p>

</div><div style="border:1px solid #990000;padding-left:20px;margin:0 0 10px 0;">

<h4>A PHP Error was encountered</h4>

<p>Severity: Warning</p>
<p>Message:  fopen(../uploads/images/_thumbs/index.html): failed to open stream: No such file or directory</p>
<p>Filename: libraries/Filemanager.php</p>
<p>Line Number: 1315</p>

</div><div style="border:1px solid #990000;padding-left:20px;margin:0 0 10px 0;">

<h4>A PHP Error was encountered</h4>

<p>Severity: Warning</p>
<p>Message:  fwrite() expects parameter 1 to be resource, boolean given</p>
<p>Filename: libraries/Filemanager.php</p>
<p>Line Number: 1316</p>

</div><div style="border:1px solid #990000;padding-left:20px;margin:0 0 10px 0;">

<h4>A PHP Error was encountered</h4>

<p>Severity: Warning</p>
<p>Message:  fclose() expects parameter 1 to be resource, boolean given</p>
<p>Filename: libraries/Filemanager.php</p>
<p>Line Number: 1317</p>

</div>{"success":true,"file_id":91,"folder_id":"2"}

I am able to upload via the native File Manager to that root directory.

I have checked permissions on the cache folder.

I have the following in config.php:

$config['assets_site_url'] = '/index.php';

$config['assets_cp_path'] = dirname(__FILE__).'/../../syncadmin/';

For server path to upload directory I have: ../uploads/images/

My system folder resides above public.

I've tried a few different solutions, including switching session from Cookies-only to Cookies + Session ID, changing permissions, changing paths, to no avail.

Any help would be greatly appreciated.

Thanks!

Mark