I'm not sure if it is appropriate to re-open this post but we're running into the same problem and the above solution doesn't do the job.
Since updating Premiere to the latest version setting and re-setting and re-re-setting the settings in "Project Settings" / "Scratch Disks" keeps re-setting back to the folder where the project is saved, in our example a server location that is not build for streaming video-files.
Is this a bug or is there a hidden setting?
thanks.