That is a Flex compiler error which is shown, when the transcoding and embedding of binary resources into the SWF movie fails. I've never seen that error, but I can locate the spot where it is thrown in the Flex SDK source code: flex2.compiler.media.DataTranscoder . The exception is thrown inside the method public static void loadData(TranscodingResults asset)
.
Maybe the SWF you are using has been corrupted. Could you try with a different SWF and see if it works? How did you create that SWF file initially? With the Flash authoring tool?
Update: Someone reported the same error message in the Apache Flex Jira. Everything worked in Windows, but he got the problem on OS X. The ownership of the file was not set correctly in his case. You have to make sure that the user used to run the Tomcat process is allowed to read the SWF file causing the problem.