Hi Chris Adams,
I believe you may have encountered a bug in which our sync process is inconsistent with our UI rules. The issue is that the sync process currently assumes that the root iteration is named "Project", which is the default when a new project is created in TeamPulse. However, the TeamPulse UI allows you to modify this value, which it appears you have done based on your description of your iteration tree.
Can you please try using the TeamPulse UI to rename your root iteration back to "Project", and then attempt a synchronization with TFS? I have attached a screenshot of our internal iteration tree showing how it should look. No changes should be required in TFS as the root iteration is always simply the name of the project.
Please let us know if this resolves your issue. If this is indeed the problem, we will log a bug against the sync service of high priority in order to get this inconsistency resolved for the next release.
the Telerik team
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