RequestFactoryServlet by default catches all exceptions and returns them to the client, without stack-traces or much details, I usually get this error if my service method throws a NPE.
If you have a look at RequestFactoryServlet , you can see the no-arg constructor creates a 'DefaultExceptionHandler', which generates this 'Server Error:...' message. You can subclass RequestFactoryServlet and use your own handler which logs the stack trace, etc.
In short, something on the server side is throwing an exception. Are you positive your server side code is not being reached? It could be the locator that is that is throwing the exception.