diff --git a/rse/plugins/org.eclipse.rse.connectorservice.ssh/src/org/eclipse/rse/internal/connectorservice/ssh/SshConnectorResources.java b/rse/plugins/org.eclipse.rse.connectorservice.ssh/src/org/eclipse/rse/internal/connectorservice/ssh/SshConnectorResources.java
index 3da2e17821b..8864966b853 100644
--- a/rse/plugins/org.eclipse.rse.connectorservice.ssh/src/org/eclipse/rse/internal/connectorservice/ssh/SshConnectorResources.java
+++ b/rse/plugins/org.eclipse.rse.connectorservice.ssh/src/org/eclipse/rse/internal/connectorservice/ssh/SshConnectorResources.java
@@ -1,16 +1,17 @@
 /*******************************************************************************
- * Copyright (c) 2006, 2008 Wind River Systems, Inc. and others.
- * All rights reserved. This program and the accompanying materials 
- * are made available under the terms of the Eclipse Public License v1.0 
- * which accompanies this distribution, and is available at 
- * http://www.eclipse.org/legal/epl-v10.html 
- * 
- * Contributors: 
- * Martin Oberhuber (Wind River) - initial API and implementation 
- * Martin Oberhuber (Wind River) - copy dialogs from team.cvs.ui 
+ * Copyright (c) 2006, 2009 Wind River Systems, Inc. and others.
+ * All rights reserved. This program and the accompanying materials
+ * are made available under the terms of the Eclipse Public License v1.0
+ * which accompanies this distribution, and is available at
+ * http://www.eclipse.org/legal/epl-v10.html
+ *
+ * Contributors:
+ * Martin Oberhuber (Wind River) - initial API and implementation
+ * Martin Oberhuber (Wind River) - copy dialogs from team.cvs.ui
  * David McKnight (IBM) - [216252] [api][nls] Resource Strings specific to subsystems should be moved from rse.ui into files.ui / shells.ui / processes.ui where possible
  * David McKnight (IBM) - [220547] [api][breaking] SimpleSystemMessage needs to specify a message id and some messages should be shared
  * Johnson Ma (Wind River) - [218880] Add UI setting for ssh keepalives
+ * Martin Oberhuber (Wind River) - [227135] Cryptic exception when sftp-server is missing
  *******************************************************************************/
 
 package org.eclipse.rse.internal.connectorservice.ssh;
@@ -27,10 +28,11 @@ public class SshConnectorResources extends NLS {
 
 	public static String SshConnectorService_Name;
 	public static String SshConnectorService_Description;
-	
+
 	public static String SshConnectorService_ErrorDisconnecting;
 	public static String SshConnectorService_Info;
 	public static String SshConnectorService_Warning;
+	public static String SshConnectorService_Missing_sshd;
 
 	//These are from org.eclipse.team.cvs.ui.CVSUIMessages
 	public static String UserValidationDialog_required;
@@ -44,9 +46,9 @@ public class SshConnectorResources extends NLS {
 
 	public static String KeyboardInteractiveDialog_message;
 	public static String KeyboardInteractiveDialog_labelConnection;
-	
+
 	public static String SSH_SETTINGS_LABEL;
 	public static String PROPERTY_LABEL_TIMEOUT;
 	public static String PROPERTY_LABEL_KEEPALIVE;
-	
+
 }
diff --git a/rse/plugins/org.eclipse.rse.connectorservice.ssh/src/org/eclipse/rse/internal/connectorservice/ssh/SshConnectorResources.properties b/rse/plugins/org.eclipse.rse.connectorservice.ssh/src/org/eclipse/rse/internal/connectorservice/ssh/SshConnectorResources.properties
index 3743d6707e1..4f3f72e1f5b 100644
--- a/rse/plugins/org.eclipse.rse.connectorservice.ssh/src/org/eclipse/rse/internal/connectorservice/ssh/SshConnectorResources.properties
+++ b/rse/plugins/org.eclipse.rse.connectorservice.ssh/src/org/eclipse/rse/internal/connectorservice/ssh/SshConnectorResources.properties
@@ -1,5 +1,5 @@
 ################################################################################
-# Copyright (c) 2006, 2008 Wind River Systems, Inc. and others.
+# Copyright (c) 2006, 2009 Wind River Systems, Inc. and others.
 # All rights reserved. This program and the accompanying materials 
 # are made available under the terms of the Eclipse Public License v1.0 
 # which accompanies this distribution, and is available at 
@@ -11,6 +11,7 @@
 # David McKnight (IBM) - [216252] [api][nls] Resource Strings specific to subsystems should be moved from rse.ui into files.ui / shells.ui / processes.ui where possible
 # David McKnight (IBM) - [220547] [api][breaking] SimpleSystemMessage needs to specify a message id and some messages should be shared
 # Johnson Ma (Wind River) - [218880] Add UI setting for ssh keepalives
+# Martin Oberhuber (Wind River) - [227135] Cryptic exception when sftp-server is missing
 ################################################################################
 
 # NLS_MESSAGEFORMAT_VAR
@@ -22,6 +23,7 @@ SshConnectorService_Description=SSH Connector Service Description
 SshConnectorService_ErrorDisconnecting=ConnectionStatusListener:  Error disconnecting
 SshConnectorService_Warning=Warning
 SshConnectorService_Info=Info
+SshConnectorService_Missing_sshd=Failed to connect sshd on "{0}:{1}"
 
 #These are from cvs.ui/messages.properties
 UserValidationDialog_required=Password Required
diff --git a/rse/plugins/org.eclipse.rse.connectorservice.ssh/src/org/eclipse/rse/internal/connectorservice/ssh/SshConnectorService.java b/rse/plugins/org.eclipse.rse.connectorservice.ssh/src/org/eclipse/rse/internal/connectorservice/ssh/SshConnectorService.java
index 021779664dc..b9dbb0afe48 100644
--- a/rse/plugins/org.eclipse.rse.connectorservice.ssh/src/org/eclipse/rse/internal/connectorservice/ssh/SshConnectorService.java
+++ b/rse/plugins/org.eclipse.rse.connectorservice.ssh/src/org/eclipse/rse/internal/connectorservice/ssh/SshConnectorService.java
@@ -1,10 +1,10 @@
 /*******************************************************************************
- * Copyright (c) 2006, 2008 Wind River Systems, Inc. and others.
+ * Copyright (c) 2006, 2009 Wind River Systems, Inc. and others.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
  * http://www.eclipse.org/legal/epl-v10.html
- * 
+ *
  * Contributors:
  * Martin Oberhuber (Wind River) - initial API and implementation
  * David Dykstal (IBM) - 168977: refactoring IConnectorService and ServerLauncher hierarchies
@@ -18,6 +18,7 @@
  * David McKnight (IBM) - [216252] [api][nls] Resource Strings specific to subsystems should be moved from rse.ui into files.ui / shells.ui / processes.ui where possible
  * David McKnight (IBM) - [220547] [api][breaking] SimpleSystemMessage needs to specify a message id and some messages should be shared
  * Johnson Ma (Wind River) - [218880] Add UI setting for ssh keepalives
+ * Martin Oberhuber (Wind River) - [227135] Cryptic exception when sftp-server is missing
  *******************************************************************************/
 
 package org.eclipse.rse.internal.connectorservice.ssh;
@@ -60,6 +61,7 @@ import org.eclipse.rse.services.clientserver.messages.CommonMessages;
 import org.eclipse.rse.services.clientserver.messages.ICommonMessageIds;
 import org.eclipse.rse.services.clientserver.messages.SimpleSystemMessage;
 import org.eclipse.rse.services.clientserver.messages.SystemMessage;
+import org.eclipse.rse.services.clientserver.messages.SystemOperationFailedException;
 import org.eclipse.rse.ui.RSEUIPlugin;
 import org.eclipse.rse.ui.SystemBasePlugin;
 import org.eclipse.rse.ui.messages.SystemMessageDialog;
@@ -192,7 +194,8 @@ public class SshConnectorService extends StandardConnectorService implements ISs
 			if(e.toString().indexOf("Auth cancel")>=0) {  //$NON-NLS-1$
 				throw new OperationCanceledException();
 			}
-			throw e;
+			throw new SystemOperationFailedException(Activator.PLUGIN_ID, NLS.bind(SshConnectorResources.SshConnectorService_Missing_sshd, 
+					host, Integer.toString(getSshPort())), e);
 		}
 		userInfo.connectionMade();
 		fSessionLostHandler = new SessionLostHandler(this);
@@ -272,7 +275,7 @@ public class SshConnectorService extends StandardConnectorService implements ISs
 	 * Handle session-lost events.
 	 * This is generic for any sort of connector service.
 	 * Most of this is extracted from dstore's ConnectionStatusListener.
-	 * 
+	 *
 	 * TODO should be refactored to make it generally available, and allow
 	 * dstore to derive from it.
 	 */
diff --git a/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/SshServiceResources.java b/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/SshServiceResources.java
index fdc547e57c0..93200bf273f 100644
--- a/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/SshServiceResources.java
+++ b/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/SshServiceResources.java
@@ -1,14 +1,15 @@
 /*******************************************************************************
  * Copyright (c) 2006, 2009 Wind River Systems, Inc.
- * All rights reserved. This program and the accompanying materials 
- * are made available under the terms of the Eclipse Public License v1.0 
- * which accompanies this distribution, and is available at 
- * http://www.eclipse.org/legal/epl-v10.html 
- * 
- * Contributors: 
- * Martin Oberhuber (Wind River) - initial API and implementation 
+ * All rights reserved. This program and the accompanying materials
+ * are made available under the terms of the Eclipse Public License v1.0
+ * which accompanies this distribution, and is available at
+ * http://www.eclipse.org/legal/epl-v10.html
+ *
+ * Contributors:
+ * Martin Oberhuber (Wind River) - initial API and implementation
  * Yu-Fen Kuo       (MontaVista) - [170910] Integrate the TM Terminal View with RSE
  * Anna Dushistova  (MontaVista) - [261478] Remove SshShellService, SshHostShell (or deprecate and schedule for removal in 3.2)
+ * Martin Oberhuber (Wind River) - [227135] Cryptic exception when sftp-server is missing
  *******************************************************************************/
 
 package org.eclipse.rse.internal.services.ssh;
@@ -18,24 +19,19 @@ import org.eclipse.osgi.util.NLS;
 public class SshServiceResources extends NLS {
 	private static final String BUNDLE_NAME = "org.eclipse.rse.internal.services.ssh.SshServiceResources"; //$NON-NLS-1$
 
-	public static String SftpFileService_Error_download_size;
-
-	public static String SftpFileService_Error_upload_size;
-
-	public static String SshPlugin_Unexpected_Exception;
-	
+	public static String SftpFileService_Name;
 	public static String SftpFileService_Description;
-
 	public static String SftpFileService_Error_JschSessionLost;
-
+	public static String SftpFileService_Error_download_size;
+	public static String SftpFileService_Error_upload_size;
+	public static String SftpFileService_Error_no_sftp;
 	public static String SftpFileService_Msg_Progress;
 
-	public static String SftpFileService_Name;
+	public static String SshPlugin_Unexpected_Exception;
 
 	public static String SshTerminalService_Name;
-	
 	public static String SshTerminalService_Description;
-	
+
 	static {
 		// initialize resource bundle
 		NLS.initializeMessages(BUNDLE_NAME, SshServiceResources.class);
diff --git a/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/SshServiceResources.properties b/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/SshServiceResources.properties
index 1bc4a258fbe..2f7a35c168d 100644
--- a/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/SshServiceResources.properties
+++ b/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/SshServiceResources.properties
@@ -9,6 +9,7 @@
 # Martin Oberhuber (Wind River) - initial API and implementation 
 # Yu-Fen Kuo       (MontaVista) - [170910] Integrate the TM Terminal View with RSE
 # Anna Dushistova  (MontaVista) - [261478] Remove SshShellService, SshHostShell (or deprecate and schedule for removal in 3.2)
+# Martin Oberhuber (Wind River) - [227135] Cryptic exception when sftp-server is missing
 ################################################################################
 
 # NLS_MESSAGEFORMAT_VAR
@@ -20,7 +21,8 @@ SftpFileService_Name=Ssh / Sftp File Service
 SftpFileService_Description=Access a remote file system via Ssh / Sftp protocol
 SftpFileService_Error_JschSessionLost=jsch session lost
 SftpFileService_Error_upload_size=Ssh upload: file size mismatch for {0} 
-SftpFileService_Error_download_size=Ssh download: file size mismatch for {0} 
+SftpFileService_Error_download_size=Ssh download: file size mismatch for {0}
+SftpFileService_Error_no_sftp=Failed to connect SFTP subsystem: Remote host may not have sftp-server installed 
 SftpFileService_Msg_Progress={0,number,integer} KB of {1,number,integer} KB complete ({2,number,percent})
 
 SshTerminalService_Name=SSH Terminal Service
diff --git a/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/files/SftpFileService.java b/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/files/SftpFileService.java
index 15767e1899f..d8bc6a76d44 100644
--- a/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/files/SftpFileService.java
+++ b/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/files/SftpFileService.java
@@ -1,5 +1,5 @@
 /*******************************************************************************
- * Copyright (c) 2006, 2008 Wind River Systems, Inc. and others.
+ * Copyright (c) 2006, 2009 Wind River Systems, Inc. and others.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
@@ -35,6 +35,7 @@
  * David McKnight   (IBM)        - [235472] [ssh] RSE doesn't show correct properties of the file system root ("/")
  * Martin Oberhuber (Wind River) - [238703] getFile() needs to lstat for consistency with internalFetch()
  * Martin Oberhuber (Wind River) - [237616][ssh] Dont perform forced setLastModified during upload
+ * Martin Oberhuber (Wind River) - [227135] Cryptic exception when sftp-server is missing
  *******************************************************************************/
 
 package org.eclipse.rse.internal.services.ssh.files;
@@ -82,6 +83,7 @@ import org.eclipse.rse.services.clientserver.messages.SystemLockTimeoutException
 import org.eclipse.rse.services.clientserver.messages.SystemMessage;
 import org.eclipse.rse.services.clientserver.messages.SystemMessageException;
 import org.eclipse.rse.services.clientserver.messages.SystemOperationCancelledException;
+import org.eclipse.rse.services.clientserver.messages.SystemOperationFailedException;
 import org.eclipse.rse.services.clientserver.messages.SystemUnexpectedErrorException;
 import org.eclipse.rse.services.files.AbstractFileService;
 import org.eclipse.rse.services.files.HostFilePermissions;
@@ -177,6 +179,8 @@ public class SftpFileService extends AbstractFileService implements ISshService,
 	private static String defaultEncoding = new java.io.InputStreamReader(new java.io.ByteArrayInputStream(new byte[0])).getEncoding();
 	/** Indicates the encoding that our JSch channel uses */
 	private String fJSchChannelEncoding = defaultEncoding;
+	private long fLastConnectFailureTime = 0;
+	private static long CONNECT_RETRY_MILLIS = 10000; //re-try unsuccessful sftp connect attempt after 10 seconds
 
 	//	public SftpFileService(SshConnectorService conn) {
 	//		fConnector = conn;
@@ -338,8 +342,11 @@ public class SftpFileService extends AbstractFileService implements ISshService,
 	}
 
 	public void connect() throws SystemMessageException {
-		Activator.trace("SftpFileService.connecting..."); //$NON-NLS-1$
+		if (fLastConnectFailureTime > 0 && System.currentTimeMillis() - fLastConnectFailureTime < CONNECT_RETRY_MILLIS) {
+			throw new SystemOperationFailedException(Activator.PLUGIN_ID, SshServiceResources.SftpFileService_Error_no_sftp);
+		}
 		try {
+			Activator.trace("SftpFileService.connecting..."); //$NON-NLS-1$
 			Session session = fSessionProvider.getSession();
 			Channel channel=session.openChannel("sftp"); //$NON-NLS-1$
 			channel.connect();
@@ -349,7 +356,8 @@ public class SftpFileService extends AbstractFileService implements ISshService,
 			Activator.trace("SftpFileService.connected"); //$NON-NLS-1$
 		} catch(Exception e) {
 			Activator.trace("SftpFileService.connecting failed: "+e.toString()); //$NON-NLS-1$
-			throw makeSystemMessageException(e);
+			fLastConnectFailureTime = System.currentTimeMillis();
+			throw new SystemOperationFailedException(Activator.PLUGIN_ID, SshServiceResources.SftpFileService_Error_no_sftp, e);
 		}
 	}
 
@@ -1118,13 +1126,13 @@ public class SftpFileService extends AbstractFileService implements ISshService,
 	public void initService(IProgressMonitor monitor) {
 		Activator.trace("SftpFileService.initService"); //$NON-NLS-1$
 		super.initService(monitor);
-		try
-		{
-			connect();
-		}
-		catch (Exception e)
-		{
-		}
+		// try
+		// {
+		// connect();
+		// }
+		// catch (Exception e)
+		// {
+		// }
 	}
 
 	public void uninitService(IProgressMonitor monitor) {
diff --git a/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/archiveutils/ArchiveHandlerManager.java b/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/archiveutils/ArchiveHandlerManager.java
index f3052fe26cc..226fdd7de9e 100644
--- a/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/archiveutils/ArchiveHandlerManager.java
+++ b/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/archiveutils/ArchiveHandlerManager.java
@@ -1,5 +1,5 @@
 /*******************************************************************************
- * Copyright (c) 2003, 2008 IBM Corporation and others.
+ * Copyright (c) 2003, 2009 IBM Corporation and others.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
@@ -18,6 +18,7 @@
  * Xuan Chen (IBM) - [218491] ArchiveHandlerManager#cleanUpVirtualPath is messing up the file separators (with updated fix)
  * Johnson Ma (Wind River) - [195402] [api] add tar.gz archive support
  * Martin Oberhuber (Wind River) - [199854][api] Improve error reporting for archive handlers
+ * Martin Oberhuber (Wind River) - [227135] Cryptic exception when sftp-server is missing
  *******************************************************************************/
 
 package org.eclipse.rse.services.clientserver.archiveutils;
@@ -308,11 +309,11 @@ public class ArchiveHandlerManager
 				catch (InvocationTargetException e)
 				{
 					//Throwable target = e.getCause();
-					throw new SystemOperationFailedException(IClientServerConstants.PLUGIN_ID, "instantiate handler for " + file.getName(), e); //$NON-NLS-1$
+					throw new SystemOperationFailedException(IClientServerConstants.PLUGIN_ID, "Failed to instantiate handler for " + file.getName(), e); //$NON-NLS-1$
 				}
 				catch (Exception e)
 				{
-					throw new SystemOperationFailedException(IClientServerConstants.PLUGIN_ID, "instantiate handler for " + file.getName(), e); //$NON-NLS-1$
+					throw new SystemOperationFailedException(IClientServerConstants.PLUGIN_ID, "Failed to instantiate handler for " + file.getName(), e); //$NON-NLS-1$
 				}
 				_handlers.put(file, handler);
 				return handler;
@@ -500,7 +501,7 @@ public class ArchiveHandlerManager
 
 	/**
 	 * Create an empty archive
-	 * 
+	 *
 	 * @throws SystemMessageException in case of an error
 	 * @since 3.0 returns void but throws SystemMessageException
 	 */
diff --git a/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/messages/CommonMessages.java b/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/messages/CommonMessages.java
index cc89d0e304c..f2d20178ec2 100644
--- a/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/messages/CommonMessages.java
+++ b/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/messages/CommonMessages.java
@@ -1,5 +1,5 @@
 /********************************************************************************
- * Copyright (c) 2008 IBM Corporation. All rights reserved.
+ * Copyright (c) 2008, 2009 IBM Corporation and others. All rights reserved.
  * This program and the accompanying materials are made available under the terms
  * of the Eclipse Public License v1.0 which accompanies this distribution, and is
  * available at http://www.eclipse.org/legal/epl-v10.html
@@ -12,6 +12,7 @@
  * David McKnight   (IBM)        - [220547] [api][breaking] SimpleSystemMessage needs to specify a message id and some messages should be shared
  * David McKnight   (IBM)        - [223204] [cleanup] fix broken nls strings in files.ui and others
  * Martin Oberhuber (Wind River) - [226374] [api] Need default SystemMessageException specialisations
+ * Martin Oberhuber (Wind River) - [227135] Cryptic exception when sftp-server is missing
  ********************************************************************************/
 package org.eclipse.rse.services.clientserver.messages;
 
@@ -27,7 +28,12 @@ public class CommonMessages extends NLS {
 
 	public static String MSG_EXCEPTION_OCCURRED;
 	public static String MSG_ERROR_UNEXPECTED;
-
+	/**
+	 * General message format for concatenating a message with a cause
+	 *
+	 * @since 3.1
+	 */
+	public static String MSG_FAILURE_WITH_CAUSE;
 
 	public static String MSG_COMM_AUTH_FAILED;
 	public static String MSG_COMM_AUTH_FAILED_DETAILS;
diff --git a/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/messages/CommonMessages.properties b/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/messages/CommonMessages.properties
index 5a10a076407..bf63a500ca3 100644
--- a/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/messages/CommonMessages.properties
+++ b/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/messages/CommonMessages.properties
@@ -1,5 +1,5 @@
 ###############################################################################
-# Copyright (c) 2008 IBM Corporation and others.
+# Copyright (c) 2008, 2009 IBM Corporation and others.
 # All rights reserved. This program and the accompanying materials
 # are made available under the terms of the Eclipse Public License v1.0
 # which accompanies this distribution, and is available at
@@ -14,6 +14,7 @@
 # David McKnight   (IBM)        - [223204] [cleanup] fix broken nls strings in files.ui and others
 # Xuan Chen        (IBM)        - [226784] [nls] Review Canceled vs. Cancelled in NLS Strings
 # Martin Oberhuber (Wind River) - [226374] [api] Need default SystemMessageException specialisations
+# Martin Oberhuber (Wind River) - [227135] Cryptic exception when sftp-server is missing
 ###############################################################################
 
 # NLS_MESSAGEFORMAT_VAR
@@ -21,6 +22,7 @@
 
 
 MSG_EXCEPTION_OCCURRED = An unexpected exception has occurred
+MSG_FAILURE_WITH_CAUSE = {0}: {1}
 
 MSG_COMM_AUTH_FAILED=Invalid password or user ID
 MSG_COMM_AUTH_FAILED_DETAILS=Authentication with {0} failed because the password or user ID is not correct.
diff --git a/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/messages/SystemOperationFailedException.java b/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/messages/SystemOperationFailedException.java
index de769288f7f..c60585db593 100644
--- a/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/messages/SystemOperationFailedException.java
+++ b/rse/plugins/org.eclipse.rse.services/clientserver/org/eclipse/rse/services/clientserver/messages/SystemOperationFailedException.java
@@ -1,5 +1,5 @@
 /*******************************************************************************
- * Copyright (c) 2008 Wind River Systems, Inc. and others.
+ * Copyright (c) 2008, 2009 Wind River Systems, Inc. and others.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
@@ -7,6 +7,7 @@
  *
  * Contributors:
  * Martin Oberhuber (Wind River) - initial API and implementation
+ * Martin Oberhuber (Wind River) - [227135] Cryptic exception when sftp-server is missing
  *******************************************************************************/
 
 package org.eclipse.rse.services.clientserver.messages;
@@ -65,39 +66,52 @@ public class SystemOperationFailedException extends SystemRemoteMessageException
 	}
 
 	/**
-	 * Constructor with plugin ID and operation being performed.
+	 * Constructor with plugin ID and user message.
 	 *
-	 * @param remoteException the initial cause of this exception
+	 * @param pluginId ID of the plugin issuing the message.
+	 * @param userMessage user-readable message detailing cause of the
+	 *            exception, or <code>null</code>. If not specified, a generic
+	 *            message will be used ("Operation failed with exception").
+	 * @param remoteException the initial cause of this exception. Will be added
+	 *            to the user message.
 	 */
-	public SystemOperationFailedException(String pluginId, String operationPerformed, Exception remoteException) {
-		super(getMyMessage(pluginId, operationPerformed, remoteException), remoteException);
+	public SystemOperationFailedException(String pluginId, String userMessage, Exception remoteException) {
+		super(getMyMessage(pluginId, userMessage, remoteException), remoteException);
 	}
 
-	private static SystemMessage getMyMessage(String pluginId, String operationPerformed, Exception remoteException) {
+	private static SystemMessage getMyMessage(String pluginId, String userMessage, Exception remoteException) {
 
-		String message = operationPerformed;
+		String exceptionMessage = null;
 		String secondLevel = null;
 		if (remoteException != null) {
-			message = remoteException.getMessage();
-			if (message == null) {
-				message = remoteException.getClass().getName();
+			exceptionMessage = remoteException.getMessage();
+			if (exceptionMessage == null) {
+				exceptionMessage = remoteException.getClass().getName();
 			}
 			Throwable cause = remoteException.getCause();
 			if (cause != null) {
 				secondLevel = cause.getMessage();
 				if (secondLevel == null) {
 					secondLevel = cause.getClass().getName();
-					if (secondLevel.equals(message)) {
+					if (secondLevel.equals(exceptionMessage)) {
 						secondLevel = null;
 					}
 				}
 			}
-			if (operationPerformed != null) {
-				// FIXME Use Java MessageFormat for better formatting
-				secondLevel = (secondLevel != null) ? operationPerformed + " : " + secondLevel : operationPerformed; //$NON-NLS-1$
-			}
 		}
-		String msgTxt = NLS.bind(CommonMessages.MSG_OPERATION_FAILED, message);
+		String msgTxt = userMessage;
+		if (msgTxt == null) {
+			// no user text -- use standard message with (non-localized)
+			// exception message + second level
+			msgTxt = NLS.bind(CommonMessages.MSG_OPERATION_FAILED, exceptionMessage);
+		} else if (secondLevel == null) {
+			// user text but no second level -- move exception text to 2nd level
+			secondLevel = exceptionMessage;
+		} else {
+			// user text, exception and second level -- concatenate user text
+			// and exception
+			msgTxt = NLS.bind(CommonMessages.MSG_FAILURE_WITH_CAUSE, userMessage, exceptionMessage);
+		}
 
 		SystemMessage msg = new SimpleSystemMessage(pluginId, ICommonMessageIds.MSG_OPERATION_FAILED,
 				IStatus.ERROR, msgTxt, secondLevel);
diff --git a/rse/plugins/org.eclipse.rse.shells.ui/src/org/eclipse/rse/shells/ui/view/SystemViewRemoteOutputAdapter.java b/rse/plugins/org.eclipse.rse.shells.ui/src/org/eclipse/rse/shells/ui/view/SystemViewRemoteOutputAdapter.java
index c63ddb47391..da11d03f92a 100644
--- a/rse/plugins/org.eclipse.rse.shells.ui/src/org/eclipse/rse/shells/ui/view/SystemViewRemoteOutputAdapter.java
+++ b/rse/plugins/org.eclipse.rse.shells.ui/src/org/eclipse/rse/shells/ui/view/SystemViewRemoteOutputAdapter.java
@@ -29,6 +29,7 @@
  * David McKnight   (IBM)        - [233349] Could not drag and drop file from Shell view to local folder.
  * David McKnight   (IBM)        - [233475] Cannot drag and drop file/folder within the shell output
  * Kevin Doyle		(IBM)		 - [247297] Double Clicking on a Shell doesn't open that Shell
+ * Martin Oberhuber (Wind River) - [227135] Cryptic exception when sftp-server is missing
  *******************************************************************************/
 
 package org.eclipse.rse.shells.ui.view;
@@ -377,9 +378,12 @@ implements ISystemRemoteElementAdapter
 	}
 
 	/**
-	 * Returns the associated IRemoteFile for this line of remote output if one exists
+	 * Returns the associated IRemoteFile for this line of remote output if one
+	 * exists
+	 * 
 	 * @param output the line of remote output
-	 * @return the associated remote file
+	 * @return the associated remote file, or <code>null</code> if an error
+	 *         occurred
 	 */
 	public static IRemoteFile outputToFile(IRemoteOutput output)
 	{