Problem:
Customer reported that after installing WrapPack #3 for Net Express 5.0 he started getting the following error message when compiling any COBOL program from Visual Studio 2005:
error COBCH0857 : System error - failure during ILASM phase
Resolution:
In WrapPack 3 the checker was modified to use some temporary directories on the system.
The problem was solved by changing the following registry entry that disables the creation of short names. And on the problematic machine this entry was set to true.
HKLM\\SYSTEM\\CurrentControlSet\\Control\\FileSystem\\NtfsDisable8dot3NameCreation = TRUE
The solution was to set this entry to false and recreate your logon on that machine.