ASP.NET project added to root folder

Server:
Linux Gentoo Kernel 2.6.16-r9 running both xinetd and apache2

Client:
Microsoft VS.NET 2003

Protocol:
This happen with both http:// and svn://

Plug-In:
SVN SCC

Hi,
I have a solution file containing a mixture of Windows and ASP.NET project
in VS2003. All these projects resides in a root folder called E:\Projects
in their respective folder. The solution file reside in the E:\Projects
folder. When I add the solution to the server, all the respective folders
got created and added to a subfolder under the root folder specified in the
dialog except on ASP.NET project.
This get created under the root folder instead even though it reside in the
subfolder under E:\Projects. So, on the SVN server, instead of this
structure:
Root - Project 1
- Project 2
- Project 3
I get
Root - Project 1
- Project 2
- Contents and Subfolder of Project 3
I thought it might have to do with the way the solution is created, so I go
ahead and create a blank solution and imported all the projects one by one.
After adding the new solution to source control, I still get the same
layout. Any idea what might be causing this?

Thanks CJ