This happened to me as well; it was very frustrating.
I found this at the modmyi website:
Known Issues
Release 1.5.0-1
◦Issue that if a folder iFile starts with did not exist, iFile shows the spinning wheel forever.
◦Crash when transferring a file from iFile to iFile (sender crashes).
◦When a user chooses select all, iFile does not enable the toolbar buttons.
◦Crash when tapping on folder in search results of hierarchical search.
◦Opening files in iFile via URL ifile:///<path> does not work anymore. This is a problem in context with Attachment Saver and Safari Download Manager.
◦Crash when choosing a viewer for a file without known type for 4th time.
For some reason my "/var/mobile/documents folder was gone.
I recreated it through ssh, and voila...everything worked again.
Hope this works for you.
Jeff