Yesterday, I reported my work around for this problem. I am creating this post so the search engines identify it more easily. I have been syncing fine since then and it solved J Powers (from Ilium blog) same issue.
Here are the steps I took:
1. delete all wallets from the iPhone. Go to Home.
2. remove partnership in desktop eWallet, close.
3. rename your ewallet file to new name (do not use a previous name) on the desktop.
4. open eWallet on both the iPhone and desktop.
5. create the partnership and sync
If you are having other issues; make sure you read the entire thread on the Ilium blog.
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