Just a quick follow-up re. the above. [okay, after typing this up, it wasn't really that quick after all

]
In looking at Amon_RA's recovery source code (specifically, recovery.c), the nandroid-mobile.sh script is fork'd (launched) and monitored for its termination status. Any non-normal or non-zero termination status by the script for a Nandroid restore will lead to the error message that the OP reported. Unfortunately, Amon_RA's recovery.c stub does not report the exit status (tsk-tsk

)--there's actually only three different exit statuses that are returned by the nandroid-mobile.sh script (0, 1, and a single instance of an exit status 2).
Now, looking in the Eris-specific nandroid-mobile.sh script, here are the conditions under which the script returns with a non-zero exit/return status:
- status 1: battery charge under specified threshold (30% for a restore)
- status 1: selecting more than one main script function (i.e., backup and restore in the same invocation)
- status 1: inability to mount the /sdcard
- status 1: improper combination of arguments passed to the script
- status 1: inability to find the mkyaffs2image utility for a backup
- status 1: inability to find the dump_image utility for a backup
- status 1: inability to find the flash_image utility for a backup
- status 1: inability to find the unyaffs utility for a backup
- status 1: if the script was not invoked while in recovery
- status 1: if the phone's device-id cannot be identified
- status 1: if the script was not launched under root
Restore-specific non-zero status codes:
- status 1: battery charge under specified threshold (30% for a restore)
- status 1: inability to mount the /sdcard (hmmm....possibility...)
- status 2: inability to find any backups in the Nandroid backup directory (alarm bells?
spaces in your backup directory's filename?)
- status 1: inability to mount the /data partition
- status 1: inability to mount the /system partition
- status 1: inability to find the nandroid.md5 file in the selected backup directory
- status 1: inability to find the gzip utility
- status 1: not enough free space (100MB) available for decompressing files if needed
- status 1: mis-matched MD5 sums while verifying the checksums of the files contained in the nandroid.md5 file (i.e., your Nandroid backup is verified to ensure that each file is complete and uncorrupted)
- status 1: inability to mount the ext2 partition (if applicable)
Backup-specific non-zero status code:
- status 1: inability to mount /system or /data as read-only or the /sdcard as read-write
- status 1: inability to create the backup directory on the /sdcard
- status 1: inability to write (touch) a file in the /sdcard's backup directory
- status 1: not enough free-space (130MB) on the /sdcard
- status 1: fatal errors in attempting to dump_image the /boot, /recovery, or /misc partitions (even after 5 attempts); note: which partitions are backed-up are controlled via command-line arguments
- status 1: inability to mount the ext2 partition (if applicable)
There are other nandroid-mobile.sh functions that also return exit statuses similar to the above, but are not relevant to this conversation.
After researching the above, I would think its most likely that the OP had spaces in his Nandroid backup directory name as VanDums and BlueDC2 suggested (and doogald has in many other threads). Failing that, possibly a flakey /sdcard?
Survey says?
Cheers! Hope this was useful.