I'm not really sure what's the issue here @phillevansrdb. Could you elaborate on what's not working for you providing some additional information about your setup and maybe screenshots depicting the matter at hand so I can investigate further?
@Walter, The problem name is "magic numbers". We will see how long it will take development realize that. Also, another name (sometimes) is "internal metadata". This approach is used in most modern OSes! More precisely, file browsers and other previewing tools (where this is not OS specific).
I'm sorry that this had to be your first post on our Community @MattMidC- I'll do my best to help with this!
What you describe might have to do with the 3rd party app trying to access a placeholder file and not the actual file itself as it has been set to be 'Online Only'. These placeholders are merely the metadata needed to recall the original file.
As you might have noticed, a Smart Sync placeholder takes up approximately 0kb - this is the pysical size. The logical size of the file is the actual size of the file, if it were downloaded to the device.
This is probably why you don't get the same results with local files.
As for the Windows error you get (Error 0x80070780), this can be caused by a number of things such as disk errors, permissions (do you have admin rights on the user account you're seeing this error on and also installed our desktop app with admin rights?) etc. A Windows related community would be a better place to learn more about it and how to tackle it.
A way to tackle this without having to make all your files available locally again, would be to create a folder with the most needed files (maybe name it accordingly too) and have those set to 'Local' so you can work on them seamlessly (and not having to download the whole 80 GB folder you mentioned).
I know it's not much of a solution rather than a simple walk-around but I hope it helps to some extent.
Let me know if you have any questions and welcome to our Community!