Coworker started getting the above message in the event log and as dialog during install.  Argument [2] was File and argument [3] was a specific file.

Error dialog read  

Product: (app name) -- The installer has encountered an unexpected error installing this package. This may indicate a problem with this package. The error code is 2602.

Package was a vendor-provided MSI that had been installed administratively, and then a patch (.msp) applied to the administrative install point.

With some digging we found that the MSI still had the entries in the media table pointing at the CAB files, and that there were several files at the end of the sequence that did not have corresponding entries in the Media table (last sequence 990 in Media table, last entry in File table had sequence 994).  Attributes on files in the File table all had the msidbFileAttributesCompressed (&16384) attribute set, so they were all expecting to be within the CAB files, but since this was an admin install there were no CAB files.

Resolved by clearing the Media table (replace with a single entry: Disk ID 1, LastSequence 994) and going through the file table and subtracting 8192 from each entry to mark files as not compressed.  Tested and worked.