CMC connects to CCC using 2 different methods.
It uses a direct messaging connection to send & receive the media database info, but this does not include any artwork.
And it uses a Windows Shared Folder to retrieve all artwork, like disc covers and fanart backgrounds.
The reason you believe the sync is working correctly is that the first method is working, so you are getting database updates. But the error is explaining that the artwork is not being updated. Since artwork gets copied locally by CMC, at first you may not even notice this issue, except for seeing the "?" covers show up for new titles (the "?" is the missing cover placeholder).
If you go into Settings > Chameleon Central Controller, you will see that there are 2 different connectivity test buttons, the second one testing the shared folder connectivity, and I expect that this will fail. So there really is an issue here that needs to be addressed.
Possible causes:
A) Shared Folder could be missing. On your CCC PC, you can close and relaunch CCC, and if the folder is missing it will offer to create it for you.
B) The user credentials for connecting to the share are wrong or no longer valid. This could happen if you changed a password, for example. To fix, in CCC you would go into Settings > Startup Options, and at the top there you would enter the correct password, and optionally change the user if you want it to use a different user account other than the one you are currently using yourself.
C) Possible shared folder corruption if you moved CCC or renamed its directory. If this sounds like your issue, let me know and I can help you fix. This is actually a Windows issue, it kinda freaks out if you change the directory structure that contains a shared folder.
D) Firewall issues. This is probably least likely, since CMC is reaching the CCC PC, so I'd focus on A and B first.
I know it may seem weird that you enter the username/password into CCC's Settings to fix CMC logging into CCC, but this really is how it works. When CMC connects to CCC using the first method direct messaging method to get the DB updates, it also gets the username/password you've configured. It then uses those credentials to log into the shared folder and grab the artwork. This makes it easier to maintain a whole house full of CMC HTPC's, you only have to enter the user/password info once, into CCC, rather than separately on every single CMC PC. But you also have to maintain it if there are any changes.
Hope that helps. If you need more info, please check out this link:
104 - Initial CCC Configuration