I have the same problem. I had a successful datafeed for months, the when I try to login into my Froogle merchant page, it asks me to establish an ftp feed. I still had an active hedwig ftp account. I say ok, try to create a new feed, nope! says my site's url is already in use. duh!
It has been months like this and I have given up til tonite. I sent froogle support an email to try and clear this up.