Deleting is covered in the WWDC presentation and wont work due to how it is designed. You basically have to use soft deletes instead.

I've attached two sets of the contents of the apps document support folder after running in the simulator. One after the first sync (no errors in the log) and the second after doing a second sync and getting the errors about modifying the zone.

Do you mean the sqlite file that the store is using?

-- removed this i replied below