fips errors

I am a small webmaster with a VPS at Hostgator.
I am using SFTP to transfer files on port 22 to and from my WHM server.
As long as I only transfer files, I can select dozens and drag them to a local drive and everything transfers fine. However if I select files and directories and drag them to my local drive it copies the files and some of the folders then gives me multiple instances of this error:

fips\fips.c(148): OpenSSL internal error, assertion failed: FATAL FIPS SELFTEST FAILURE

I have enabled FIPS in my win XP local security policy.
My VPS has a good SSL certificate and I am able to access using https when accessing my website's control panel.
I am using centurylink 5Mb DSL with a static ip.
The error only seems to occur when I transfer a mix of files and directories.
I do not wish to transfer the files without encryption.

Any suggestions?
Thank you in advance for you time.

Please post the system information from the menu: Help->About "System Information" dialog.

Here is more to consider:
The error SmartFTP.exe shows when it quits is:
The exception unknown software exception (0x400000015)occurred in the ication at location 0x528a5f77

Please post the system information from the menu: Help->About "System Information" dialog.

+- System -----------------------------
Microsoft Windows XP Professional
Service Pack 3 (Build 2600)

CPU Speed : 2799 MHz
Total Memory : 2047 MB
Free Memory : 1932 MB

+- SmartFTP ---------------------------
Version : 4.0.1124.0
Time Stamp : 2010-07-14 20:17:47
Platform : x86
Id : 400011708
Maintenance : 2011-06-21
Days in use : 1032

+- Language ---------------------------
en-US

+- Internet Explorer ------------------
Version : 8.0.6001.18702

+- Winsock ----------------------------
Winsock : 2.2