Hi there,
It seems like maybe the Context.msi package has a shortcut in it that Repackager is choking on.
Since it's actually the *.msi package at that point, I might as a workaround only build the *.ism project files, and then open the main *.ism (as opposed to *.context.ism) and build it from within InstallShield. This would skip the context package, which is really only useful for Virtualization.
If you'd like, you could upload the Repackager projects, as well as the copy of *.context.ism so I could look and see if there's anything obvious going on.