The weird part was drivepool did not recognize that most of the data had already been cleared out of the cache drive (and uploaded to the cloud). I finally restarted my server. It took at least an hour to reboot. Then Clouddrive was mad - said I did an unsafe shutdown and was having to re-synchronize. I also had to ask drivepool to re-check duplication a second time to make it happy, but now it's acting as it should with no out of space errors.
The one thing I find odd is the time drivepool takes to make an additional copy for the cloud. There a basically open SSD drive waiting to cache the data and it takes hours to make a copy and provide it for cloud. It sounds like it should be fast based on the link above discussing how the cache works. Any thoughts on why it is slow?
In case it matters here is what I am doing:
1. 3 local hard drives (4TB, 4TB, 1.5TB)
2. 1 cloud drive (800GB)
3. Using folder duplication.
4. Most folders have 2 copies on local drives and some only 1.
5. Pictures folder had 3 copies - all on local drives and completed before I added the cloud drive.
6. Once I added the cloud drive I went into drivepool / pool options / balancing / file placement and deselected the cloud drive for all folders except the Pictures folder.
7. Then started changing folders under Pictures to have 4 copies - the cloud drive was the only option to make the 4th copy.
8. I did not do the entire folder (~275GB) at once - a few folders at a time.
Can you tell I'm worried about losing any photos? ;-)