check to make sure your preview image is .png and named.... I think preview.png?

Everything with the image is ok...i named it preview.png and its path is correct in the dvf file.

Check the size of your pic. It should be no more than about 500K. My largest is 545K and it took that. Also, you don't actually have to name the pic "preview" you can just change the name in the preview folder and the workshop item script. That way you can keep the pics for mutiple challenges in the folder in case you need to redo the challenge for some reason. It also accepts .jpg files. When you first UL an item it has a number assigned to it, so you should also rename the workshop item file because it keeps the number you need if you have to make changes. So, for example, my "Paradise" challenge has a pic named paradise.jpg and the workshop item file is named paradise_workshop_item.vdf and when I need to make a change to the workshop item I just remove the "paradise_" part.

Hope that helps!

I checked and executed everything you suggested @CosmicCowboy and got the same error message. Could something be wrong with the contents of the .vdf itself? This is my first experience coding an xml, vdf, etc. so perhaps I made a mistake in a line of code or something...

Post your file here or provide a link and I'll have a look at it

http://imgur.com/JRaaFAT

I don't see anything wrong there. All I can suggest is to email bugs at madrugaworks dot com and see if Martino can help...

Answer...publish it without the description and edit it on the steam page once it is created. :P