This may have already been corrected, but I just thought I would throw my 2 cents out there.

I don't think a file that you are unable to remove would cause the connection to fail for Dreamweaver. The "cannot find the remote server" suggests that whatever you are using for the Server/host to connect either has a typo or is not properly resolving. What are you using as the server to connect?
You can test the connection to the server using the command line. If you are able to connect via the command line, then it has to be a settings issue with Dreamweaver.
Using Windows (anything in quotes should be typed without them):
->Go to Start
->Click Run...
->Type "cmd" and press Enter
->Type "ftp YOURDOMAIN.COM" or "ftp SERVER.lunarpages.com" (replacing YOURDOMAIN with the name of your domain or SERVER with the name of the server where you are hosted)
->When prompted, type the account username and press Enter
->When prompted, type the password and press Enter
If the FTP connection was successful, you should see something like this:
230-User USERNAME has group access to: USERNAME
230 OK. Current restricted directory is /
ftp>
This would suggest that you are able to connect to the server via FTP, so Dreamweaver should have no issues connecting (since it uses FTP). If this is the case, you would want to examine your Dreamweaver settings.
Just as a note, Passive (PASV) FTP should be disabled when connecting to Windows servers at Lunarpages.