How to fix "Steam unable to sync" error?
Here's a great way to fix this without nuking Steam. My downloaded Steam Cloud files got out of whack.
In my case, I quit Steam, I found my Steam Cloud save folder on my PC for the game in question, and nuked it. Then I relaunched Steam and relaunched the game. It fetched fresh data from Steam Cloud and then synchronization worked again.
I used SteamDB to find the AppID for my game, then deleted that folder in the following path.
C:\Program Files (x86)\Steam\userdata\[MY STEAM USERID]\[APP ID]
Problem solved!
You might want to try:
right click on Torchlight 2 in steam library
go to Local files tab and try 'Verify Integrity Of The Game Cache...'
if that doesn't help then probably you still have some remains of the mods that cause this error and you should remove them.