Building and deploying solution in moss sometime throws error “Failed to extract the cab file” This issue generally occurs due to inconsistencies in your ddf file. Please check following for correction.
1. Open your ddf file and location duplicate entries. If found remove them
2. Open your ddf file and check if there is any entries present in ddf not included in your project.
A simple way to check is by clicking on “show all files” button in “Solution Explorer” view of visual studio 2008 and check if any file exists in root file that is not included in a project (Files not included in project will not become part of your cab files). For such files either include them in project if required or delete them from folder.