This is a common error if Developer is on a remote machine than IS.
The reason for this is, Developer is used for invoking IS services, however the ones who does the conversion from XSD to docType rely on IS.
When IS is on same machine as Developer, accessing local XSD’s can be done, but when IS is remote it has no access to local files.
As a good practice, you should place WSDL’s and references schemas into a HTTP url where both Developer and IS can access easily.
For instance if you need to regenerate the connector, the path to the local XSD is lost so even the file is on filesystem regeneration will fail. But if you keep WSDL’s and schemas on a internal web server they will always work. By the way it MUST be HTTP, having HTTPS for schemaLocation is not supported and a known limitation (yet another SOAP limitation).