See the following output. It doesn't really say that it's failing to check out /
update.

------------------
started
ERROR: svn: Could not open the requested SVN filesystem
svn: PROPFIND of '/svn/hudson/trunk/hudson': 500 Internal Server Error
(https://svn.dev.java.net)
org.tmatesoft.svn.core.SVNException: svn: Could not open the requested SVN
filesystem
svn: PROPFIND of '/svn/hudson/trunk/hudson': 500 Internal Server Error
(https://svn.dev.java.net)
at
org.tmatesoft.svn.core.internal.wc.SVNErrorManager.error(SVNErrorManager.java:69)
at
org.tmatesoft.svn.core.internal.io.dav.DAVUtil.findStartingProperties(DAVUtil.java:126)
at
org.tmatesoft.svn.core.internal.io.dav.DAVConnection.fetchRepositoryUUID(DAVConnection.java:88)
at
org.tmatesoft.svn.core.internal.io.dav.DAVRepository.testConnection(DAVRepository.java:85)
at
hudson.scm.SubversionSCM$DescriptorImpl.checkRepositoryPath(SubversionSCM.java:1221)
at hudson.scm.SubversionSCM.repositoryLocationsExist(SubversionSCM.java:1282)
at hudson.scm.SubversionSCM.checkout(SubversionSCM.java:335)
at hudson.scm.SubversionSCM.checkout(SubversionSCM.java:299)
at hudson.model.AbstractProject.checkout(AbstractProject.java:567)
at hudson.model.AbstractBuild$AbstractRunner.checkout(AbstractBuild.java:251)
at hudson.model.AbstractBuild$AbstractRunner.run(AbstractBuild.java:225)
at hudson.model.Run.run(Run.java:756)
at hudson.model.Build.run(Build.java:85)
at hudson.model.ResourceController.execute(ResourceController.java:70)
at hudson.model.Executor.run(Executor.java:77)
Caused by: org.tmatesoft.svn.core.SVNException: svn: Could not open the
requested SVN filesystem
svn: PROPFIND of '/svn/hudson/trunk/hudson': 500 Internal Server Error
(https://svn.dev.java.net)
at
org.tmatesoft.svn.core.internal.wc.SVNErrorManager.error(SVNErrorManager.java:55)
at
org.tmatesoft.svn.core.internal.wc.SVNErrorManager.error(SVNErrorManager.java:40)
at
org.tmatesoft.svn.core.internal.io.dav.DAVUtil.getResourceProperties(DAVUtil.java:64)
at
org.tmatesoft.svn.core.internal.io.dav.DAVUtil.getStartingProperties(DAVUtil.java:92)
at
org.tmatesoft.svn.core.internal.io.dav.DAVUtil.findStartingProperties(DAVUtil.java:114)
... 13 more
Recording test results
finished: FAILURE