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There are numerous threads in Blogger Help Group, including one rather long and multiposted thread in Publishing Trouble, "FTP Publishing not working.".
If you are suffering from this problem, please provide diagnostic information
- The blog BlogSpot URL (if applicable).
- The blog domain URL.
- The name of the server hosting company.
- The Blogger FTP server setting value.
(Update 11:30): Blogger Support has fixed the problem
This has been fixed.
(Update 10:30): Blogger Support has acknowleged the problem
We're looking into this now and will post an update once we have more info.