Try to answer your suggestions:
1) Yes I was successful in uploading/synching a small file. Help desk tried to convince me I had a problem with firewall or antivirus program.
2) The error report file (SyncErrorReporter found in Program Files(x86)/Family Tree Maker 2012 in your boot drive, for those who might not know about this feature) was empty. I assume this was because I never got beyond the Upload process. There doesn't seem to be a corresponding file for Upload errors.
3) I tried to Upload without media and got the same error msg.
Thanks for your thoughts. I certainly would appreciate and more ideas.