Okay, try this:
Retry doing it not in a removable disk this time. I've had this issue the last time.
If that didn't do the trick, make sure that the FTF is not corrupted. If so, redownload in SUS/PCC if necessary, then decrypt.
I extract the kernel.sin file from c2004_brazil.ftf and i try to flash this in fast boot mode i am getting following error
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