I have a local repository at k:\rpm.local with a subdirectory 00 and under it more sub-directories, i386, i686, noarch and src where I put the relevant RPM's and have a small cmd file under k:\rpm.local called createrepo.cmd consisting of
sh -c "createrepo -d k:/rpm.local"
that I run whenever I add RPM's. It has always worked fine here and during my dial up days I used wget to download the RPM's from Netlabs.
I also, under @UNIXROOT/etc/yum/repos.d have a file, LOCAL.REPO with
[local]
name=My local repo
baseurl=file:k%3A/rpm.local
enabled=1
Note the above syntax may be wrong but works here.