Also while going through the documentation. On page 384 Manually Synchronizing Selected Distrtibution Servers.
It points out two locations for Datafiles and Patches.
On my Windows Server 2008 r2
The patches are in C:\ProgramData\Shavlik Technologies\NetChk\Patches.
Just a few questions about your setup. Is auto sync enabled for this Distribution Server, within Tools > Operations > Distribution Servers?
How often is it setup to sync within Tools > Operations > Distribution Servers?
Is the sync completing successfully? You can look at this data within View > Event History.
I believe that I found the issue. Checked the Sharing and Security Permissions and even though Everyone was set to change and read permission it would not work. I had to add the default ID that was used in Shavlik to the permission of the folder and it allowed the files to be copied to the folder.
That worked on 1 server for the other one. I had to delete the share and re-create it.