Clear SPD Workflow Cache

Whenever the SPD workflow is opened, it fetch the workflow details from server. When the workflow is modified and closed, all the steps are recompiled on the local machine and the same changes finally gets updated on the server.
But some times, it may happen that the workflow show the modified steps, but doesn't work accordingly. This may be due to the changes updated in the cache of local machine, but not reflected on the server workflow. This is a bug from Microsoft.
To fix this problem follow the below mentioned steps to clear the SPD activity cache:

• Close SPD.
• Open “My Computer”.
• Go to %System Drive%\Documents and Settings\%user%\Local Settings\Application Data\Microsoft\WebSiteCache (If you are running Vista, that path is different - look for %System Drive%\Users\%user%\AppData\Local\Microsoft\WebSiteCache).
• Go to a directory that looks similar to the name of the website you were connecting to. (Alternatively, you can just delete all these directories and everything should work when you boot SPD).
• Delete the assembly with the name similar to the one you are changing.
• Boot SPD.

You can now work with your updated activity.