"Why Certain Themes Won't Preview Properly in WordPress" explains that the folder or subdirectory name with a space or dash won't preview. I discovered that even an underscore prevented previewing. I left the following comment over there, but I thought I'd mention it here too at the post-level since some people might not read down into the comment section over there.
Oh, this was so helpful of you to post. I love it when people "bother" (no bother at all for some of us — I suspect you're included in that sentiment) to let others know. It's such a good thing to put oneself in the shoes of others being frustrated by technology or anything else for that matter. Bless you for it.
I had to take it a step further and not use underscores.
Also, it's a good idea to do a global search for your old folder or subdirectory name in all of your template files if you're not starting from scratch but rather doing an overhaul on an existing theme. I had an additional style-sheet-call hiding in my "single" file.
I'm trying to convert from table layout to div and css to speed up loading, so I have a mess. It's such a relief to be able to preview.