So this can be incredibly frustrating. You update a workflow, save it without errors and then publish, but the next time the workflow runs your changes aren’t there and it’s running an older version. I have a post about dealing with an issue like this, but after following my own advice and clearing out the previous versions, I still had the same problem . I stumbled upon this blog post that explains the problem. There is a SPD activity cache for your local machine and clearing that out will solve the problem.

The path for me on 64 bit Windows 7 looks like this: %System Drive%\Users\%user name%\AppData\Local\Microsoft\WebsiteCache. Inside that directory there was a folder for each SharePoint site I have worked on and occasionally an identically folder with “01” or “02” after the name. All of these directories can be deleted. Make sure you have closed SPD designer before deleting the directories, then reopen designer and publish a workflow.