Hi, imikey. Unfortunately, Apple has sometimes deigned not to provide us with very useful error messages, and that's a perfect example.
You seem to be backing up to an image: I've seen hdiutil fail when compression is selected in some situations. Try turning compression off, if it's on.
However, it might be better to back up directly to a volume, rather than to an image. Are you backing up to an image for a reason? Would a sparse image, as described
here be an acceptable alternative? It has a lot of advantages...