msflqws.pdw is probably the temp directory designated in the setup.lst file. It looks like the setup.lst file is corrupt, as it is saying that $(DLLSelfRegister.exe) is a file when it was probably *supposed to be* some other "<file>.exe" set to $(DLLSelfRegister).
Go through the Package and Deployment again and make sure that all the files are good. Then after the .CAB is made, check out setup.lst and give it a once over to make sure that all the files are listed properly.
Just my thoughts,
Jeff