Thanks for the detailed instructions! I could reproduce the problem. But I have to admit I have no idea how to fix that.
I tried not renaming the project; or removing the Sparrow reference; moving the snapshot locations to a different place ("File - Project Settings - Snapshot") -- nothing helps.
Must be a bug in Xcode! 🙁
I have a few more ideas, though:
1) Create the project from scratch. I'm not sure if that would help, though -- because that's how I created the project in the first place: http://wiki.sparrow-framework.org/tutorials/creating_a_sparrow_project_from_scratch_xcode_4
2) If you are already a registered iOS developer, you've got two support tickets per year (for free). I have used those tickets in the past, you usually get very useful and constructive help -- direct support from an Apple engineer. You could see this as an opportunity to try it out!
3) Use the branch-feature of Git. It's basically the same as the snapshots, but you have to use the command line for that. (That's how I'm always doing it, that's why I never found out about this problem.)
Sorry that I can't be of more help!