Site Cache Not Seeing All Local Files!!!

Recently Upgraded to DWMX2004 from MX. Using XP SP2.

When I copy a file into the LOCAL site folder on my computer from another
folder using windows explorer, DWMX04 does NOT see the file! For images, the
only workaround I have found is to drag files into the assets panel. This is a
HUGE pain and it seems to be a bug. Why does DWMX2004 not see all of my local
files?

Recreating the site cache does NOT solve this.

DWMX should allow drag-and-drop into the local files panel. OR.. It should
show ALL LOCAL FILES like DWMX did.

HELP! This is a productivity killer.