rsync with --update flag transfers NO files, even newer

rsync with --update flag transfers NO files, even newer

I have an rsync command like this:

rsync --dry-run --verbose  --progress --stats --update  \
      --compress --recursive --perms --links \
      --suffix SYBU \
     my.server.com::update      /home/mydir/

It examines the files, and won't return anything that already exists locally.
It is supposed to replace older files and leave newer ones alone, but it leaves them all alone.
I get this output:
   reviewing
   receiving file list ...
   51 files to consider
   
   Number of files: 51
   Number of files transferred: 0

It is hard to believe  the --update flag doesn't work, but I have tried everything.

If I take off the --update flag, all the different remote files are transferred,
even if the local copy is newer.

Both systems are centos 4.2

Both servers are in the same time zone, and the time on both systems is
correct to within a few seconds.