The SVN Book says:
Item is versioned as one kind of object (file, directory, link), but has been replaced by different kind of object.
So perhaps it was originally a single file, but you changed it to a directory, or something along those lines?
Here's what i did:
If the folder is Test
From
svn help status
'~' versioned item obstructed by some item of a different kind
I have only seen this where the file permissions had changed and svn had no execute access on it I beleive.
Hope this helps.