If you are trying to creat a new local file, I think the only way to create a local file from a Central model on Revit Server, is through the Revit open dialog. You cannot create a local file using Windows Explorer or any other way other than the check box to create new local. In other words, this means that any scripts you have for copying a central file to create a local file will not work with Revit Server.
Added to the above, the Folder Management has to be done with the Revit Server Adminstrator. You nee to use the adminstrator to create new folders, move or copy or cut or paste projects for Revit Server. Those options are not available via the open dialog in Revit.
Hope this helps...if it does Accept as Solution and if it doesn't please give more feedback
