[dnanian]

Well, the message is that there's insufficient space on the destination to hold the source.

If that's not the case (I don't have enough log to tell -- the sizes are at the top of the log for this run), I'd try booting from the appropriate OSX install disc and using Disk Utility (in the Installer application menu) to repair the external drive's structure (NOT PERMISSIONS). Then, boot back to the external and give it another try.