The error is exactly what it says - a problem writing to the setup.ini file, and it looks like it can only come from a failure writing to the file. Unfortunately this occurs in a helper method that could be called from one of many different places. I assume it's an early call, though, as it's unlikely to suddenly start failing partway through the build. Here's some steps you can try to debug it yourself:
Build using iscmdbld /v in order to receive verbose build messages. This may help track down exactly when it is occurring.
Use a tool like ProcessMonitor to see what error is being returned for what file location (probably ending in setup.ini), and whether previous accesses succeeded.
If you can reproduce this error building in a stripped down environment containing none of your source files, I can try to reproduce this with your ISM (if you can email it to me).
