First thing to try is unlinking and relinking your database, which will rebuild SQL Source Control's local working base. You won't lose any history, so this is pretty safe.
If that doesn't work, you'll need to hunt down the SQL object creation script in your repository and check that the definition looks like valid SQL.
As far as the proxy authentication error goes, when it fails you ought to be able to save the error report as a file - can you just email us that report at firstname.lastname@example.org
? If you could cite ticket no. #4820 that'd be great, thanks.