Perfect, thank you very much, this all worked. Tried filezilla and other clients as well with no avail, but the updated WinSCP was able to log in.
So aftrer some painstaking testing I found that this is actually a bug in WPML intself. I follwed the instructions in this guide and get it working.
If by any chance you encounter the same issue, just make sure to delete the translation, now that the automatic discover is enabled, it should resolve the problem.