Okay, Adding directories and other files to the dir doesn't seem to be a problem for me, it still works. But I can reproduce this problem if I make the file hidden (I'll improve this in 1.3 to permit hidden/system file attachments); as you've stated, that isn't the problem you're facing.
If you'd like to try a sneak preview of this 1.3 patch, you can modify the line in getFileList function:
filename = Dir$(templ) 'Normal files.
filename = Dir$(templ,6) 'Normal + System + Hidden files.
Perhaps being a log file, it may've been locked for exclusive access? If so, I'm not sure how to overcome that. I'll try to set up something to this effect here and see if it's a problem for me. --- Yes, exclusive locking or security problems is a problem, but these are obvious in that error messages are raised and they prevent the draft from being created at all!
Can you try a more basic test, just a single static text or image file in a folder to try and get something working?
If even that doesn't work, then it may be something different between our environments? I'm currently using a pretty recent 8.5.2FP2 client, with a Notes mail85.ntf template. From a quick read, there are some bugs in the Dir function between Notes versions which could be affecting you.