The New Document drop-down does not work in SharePoint Workspace library

I synchronize a SharePoint document library to a SharePoint 2010 Workspace successfully. When I use theNew Document drop-down to access my custom template (content type) I'm unable to create a new document from this template. I get the error:"The Internet address 'http".... is not valid'.

In other words the workspace library cannot find the template. The template is a link to a document (in the content type I did not upload the template but provided a link to the template in ta Templates library). Wouldn't the act of creating a workspace copy over the templates so that the New document button can still work?