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You WILL have to say goodbye to your local save, so if it's way more up to date than your cloud save, begin the mourning now as it currently seems to be no way to save it, at least that I know of.
I had the same problem after playing with a cloud save made from a time travelling Switch on a PC. Assuming it's the same for you, you just have to launch the cloud save and then brute force your way to do a cloud save directly FROM the PC, you don't have a choice it need to work at some point. The next time you launch the game, no more endless choice between the two saves, you load directly on the save you just made.
So yes you will loose some progress, but at least you don't have to start from scratch !
Instead, try a few things before you delete all your progress! For instance, I would disconnect from the internet and then try loading the local save file. If your cloud is newer than your local save, then delete your local profile folder, which is located here:
C:\Users\<YOURUSERNAME>\AppData\LocalLow\Gameloft\Disney Dreamlight Valley\steam_<lotsOfnumbers> and then try again. Reinstalling the game could be another option for both situations (that's the last solution I would try shortly before I would give up on my safe files).
And there are probably more ideas out there if you keep googeling.
As this was back in October of 2022, I have since given up on it. I'd done everything I could. Will keep this in mind if I have the same problem starting it back up again should I ever consider to redownload it. Thank you!