[MC-81019] Unable to join local server.

Simply updated a local server I created yesterday on 1.8.6 to 1.8.7. Flat world. Attempting to join succeeds then dc's with the error "Internal Exception: java.lang.IllegalArgumentException: Parameter 'directory' is not a directory"

server.log

[18:31:05] [Server thread/INFO]: Starting minecraft server version 1.8.7
[18:31:05] [Server thread/INFO]: Loading properties
[18:31:05] [Server thread/INFO]: Default game type: CREATIVE
[18:31:05] [Server thread/INFO]: Generating keypair
[18:31:05] [Server thread/INFO]: Starting Minecraft server on *:25565
[18:31:05] [Server thread/INFO]: Using default channel type
[18:31:05] [Server thread/INFO]: Preparing level "Trapped2"
[18:31:05] [Server thread/INFO]: Preparing start region for level 0
[18:31:06] [Server thread/INFO]: Done (0.426s)! For help, type "help" or "?"
[18:31:15] [User Authenticator #1/INFO]: UUID of player Bioniclegenius is 53656a
20-d7cb-4628-8e7f-693c07a8fe70
[18:31:15] [Server thread/INFO]: Bioniclegenius[/127.0.0.1:62741] logged in with
 entity id 51 at (234.25604043358533, 38.90382187976977, -718.3305205702668)
[18:31:15] [Server thread/INFO]: Bioniclegenius joined the game
[18:31:16] [Server thread/INFO]: Bioniclegenius lost connection: TextComponent{t
ext='Disconnected', siblings=[], style=Style{hasParent=false, color=null, bold=n
ull, italic=null, underlined=null, obfuscated=null, clickEvent=null, hoverEvent=
null, insertion=null}}
[18:31:16] [Server thread/INFO]: Bioniclegenius left the game

Happens whether the server is 1.8.6 or 1.8.7.