Building with drush make generates weird errors.

Having the file in a drush make file generates this error:

The external command could not be executed due to an application error.

The line in makefile causing the error:

projects[transliteration][version] = 3.0-dev
projects[transliteration][type] = "module"
projects[transliteration][subdir] = "contrib"
;projects[transliteration][download][type] = "file"
;projects[transliteration][download][url] = "http://alcatraz.lan/flexshare/devcache/drupal/transliteration-7.x-3.1.ta..."

As you can see, I tried makefile with local download. Also tried with 3.4 This is weird because I have like 40 other modules that download fine. I have tried clearing drush cache, and made sure make file was starting from scratch. One thing that did stand out is for some reason download the tar from local server and trying to extract it generates error. This tar.gz extracts fine on remote cache folder used to hold a copy locally of modules used in projects I work on.