Yes, that is the exact error message.
In fact, we created a very simple DTS package like reading the last entry
out of a particular table on our database and another one was mapping a
drive. Of course the DTS local package works and FAILS if we schedule it.
To make everything easy we made sure that the owner is a domain admin and
also a member of local administrators, allowed to start a service, is a dbo
and SA member, pretty much a "god" like account.
This is now becoming apparent, the part of the error message "The system
cannot find the file specified" we believe is talking about the encrypted
DTS file. Is there a key or hive within the registry that we can check?