I've almost the same configuration here:
Linux 2.4.18-6mdk
Proftpd 1.2.7rc3 with mod_tls 2.0.4 and openssl 0.9.7-beta3
FlashFXP 2.0 build 903
and no problems
here is my proftpd config:
TLSProtocol TLSv1
TLSCACertificateFile /etc/proftpd/ca.crt
TLSEngine on
TLSLog /var/log/proftpd/tls.log
TLSRequired ctrl
TLSRSACertificateFile /etc/proftpd/server.crt
TLSRSACertificateKeyfile /etc/proftpd/server.key
TLSVerifyClient off
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