This error may happen if Blancco Mobile Eraser cannot connect to Apple servers. Check that a firewall or your organization network security policy is not blocking/blacklisting the following addresses:
One way to verify the connectivity to iTunes/Apple servers is by booting a Linux live CD (e.g. Ubuntu) and trying "wget http://itunes.apple.com/check/version".
If connection to Apple servers is not blocked, it is possible that downloaded iOS firmware image is corrupted. In this case, clean the firmware images with the following steps and then try again:
If all the above does not help, it is possible that the Blancco 5 Mobile installation is corrupted (or that the software is accidentally installed on to a removable USB media). In this case, clear the existing installation and re-install the Blancco 5 Mobile software (on a local HDD/SSD that is not attached to USB).