1. Do you have full permissions to the folder you're trying to write to on the C drive?
2. Have you made sure that the LegacyExchangeDN attribute on the recovery server matches that of the server you're recovering? For information on how to change the LegacyExchangeDN attribute see Microsoft Knowledge Base Article 273863 "How to Change the LegacyExchangeDN Attribute in Native Mode with ADSI Edit".
I hope that one of these two suggestions will enable you to recover your server. I suspect the latter of the two describes the issue you are seeing.
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