Sounds like you hierarch.pm is hosed somehow. Try the following procedure. This has worked for several others to restore
the functionality of the message folders:
1. Use Help | About Pegasus Mail | Info to determine your mail
directory. Exit Pegasus mail.
2. Rename the file HIERARCH.PM in your HOME mail directory to
HIERARCH.SAV.
3. Run WinPMail. Your HIERARCH.PM will be re-created and should
start working correctly.
Note: This will delete any tray structure you have created and it
will have to be recreated. The process will not affect any
mail of mail folders you have, it only affects the display of
the folders.
Sounds like you hierarch.pm is hosed somehow.  Try  the following procedure.  This has worked for several others to restore
the functionality of the  message folders:  
1.  Use Help | About Pegasus Mail | Info to determine your mail
    directory.  Exit Pegasus mail.
2.  Rename the file HIERARCH.PM in your HOME mail directory to
    HIERARCH.SAV.
3.  Run WinPMail.  Your HIERARCH.PM will be re-created and should
    start working correctly.
Note:  This will delete any tray structure you have created and it
           will have to be recreated.  The process will not affect any
           mail of mail folders you have, it only affects the display of
           the folders.