This got rid of the error for me:

$ sudo mv /usr/bin/emacs /usr/bin/emacs.old

Now edit /usr/bin/emacs in a text editor and paste this in:

#!/bin/sh

EMACS_PATH=/Applications/MacPorts/Emacs.app/Contents/MacOS/Emacs

if [ $(id -u) = "0" ]; then
    sudo $EMACS_PATH "$@"
else
    $EMACS_PATH "$@"
fi

(Replace $EMACS_PATH with the actual path to your Emacs binary.) Finally, make your shell script executable:

$ sudo chmod +x /usr/bin/emacs

For whatever reason, Cocoa Emacs doesn't like to be linked to /usr/bin/emacs, but it runs without complaints if you invoke it from its actual path. Probably a working directory issue.

If someone knows a better way to do this, I'm all ears.

edit: updated script to handle quotes in arguments properly

I'm not sure but are you using a firewall?(not personal firewall on a PC but a router or a proxy)

I had an experience that my firewall router couldn't understand EPSV/EPRT command as the firewall was a bit old one. MacOSX uses EPSV/EPRT for its default. To avoid that, just typing 'epsv' can switch to normal passive mode. One thing I'm curious is that the server returns status "Port command successful" even though the client required a passive mode...